Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

DUNDEE CORPORATION ORDER CONFIRMATION BILL

EAST GREEN, ABERDEEN ORDER CONFIRMATION BILL

FORTH PORTS AUTHORITY ORDER CONFIRMATION BILL

CLYDE PORT AUTHORITY ORDER CONFIRMATION BILL

Considered; to be read the Third time Tomorrow.

Oral Answers to Questions — SCOTLAND

Longannet Power Station, Fife

Mr. William Hamilton: asked the Secretary of State for Scotland if he will make a statement on the progress made on the construction of the Longannet Power Station in Fife; and when the first supplies of electricity may be expected to flow.

The Minister of State, Scottish Office (Dr. J. Dickson Mahon): Construction is at an advanced stage, and I am informed that generation of electricity is expected to start before the end of this year.

Mr. Hamilton: Can my hon. Friend say whether it is behind schedule, and if so by how much, and for what reasons? Is he satisfied that the Longannet mines will be in a position to supply the power station with coal when it is in full production?

Dr. Mabon: The answer to the first point is, "Yes, it is behind time by six

months." The reasons are certain labour troubles, delivery of steel work for the peculiar kind of construction that is taking place there, and adverse weather. The answer to the second point is that we are confident that the full load of 5 million tons could be met by the pits nearby.

Water Supplies (Anti-contamination precautions)

Sir J. Gilmour: asked the Secretary of State for Scotland whether he is satisfied with the precautions taken to ensure against contamination of water supplies in Scotland; what facilities are available for detection of contamination; and if he will make a statement.

Dr. Dickson Mahon: I have no reason to think that water boards do not take all reasonable precautions in discharging their statutory duty to provide wholesome supplies, or that they do not make full use of the medical and laboratory services available to them.

Sir J. Gilmour: In view of the scare at Auchtermuchty, may I ask the hon. Gentleman whether he is satisfied that the use of chemicals which may be dangerous should be permitted in catchment areas? This is emphasised by what happened in the Rhine the other day.

Dr. Mabon: There is a difference between the position in Germany and that in our country, because we take a lot of our water from upland sources. When water is taken from a river, there are precise arrangements about filtration, and so on. The hon. Gentleman will know that Circular 32/68 lays all this out. I am concerned about what happened at Auchtermuchty, and I have looked into it closely.

Roads

Sir J. Gilmour: asked the Secretary of State for Scotland whether he will make a statement on the mileage of motorways and dual carriageway roads completed in each of the last three years; and if he will make a forecast for completions in the next three years.

Dr. Dickson Mahon: The answer given on 2nd July to my hon. Friend the Member for Rutherglen (Mr. Gregor Mackenzie) sets out the mileages up to 1968–69.
I expect that 21 miles of trunk road dual carriageways and motorways will be completed in 1969–70, 15 miles in 1970–71 and 20 miles in 1971–72.—[Vol. 786, c. 105.]

Sir J. Gilmour: Is it not a fact, though, that although the recent White Paper said that the trunk roads would be completed by 1971 at least the northern half of the road from the Forth Bridge to Perth will be far behind that date?

Dr. Mabon: Without notice I should not like to make a precise comment on that. A number of roadways have been delayed due to the statutory procedures and arguments over the line of the road. I think that this is inevitable. But we are up to date on mileage.

Mr. Manuel: Can my hon. Friend inform the House how many miles of motorway we had in 1964, and the mileage that we have today?

Dr. Mabon: In October, 1964, which I think is the month usually taken for these questions, we had two miles of motorway in Scotland. By the end of 1970, 60 miles will have been completed.

Mr. Younger: asked the Secretary of State for Scotland what have been the main causes of delays in implementing the programme for building motorways and dual carriageways in Scotland; and if he will make a statement.

Dr. Dickson Mabon: Delays in building particular roads arise through procedural and constructional difficulties, but as my right hon. Friend told the hon. Gentleman on 24th June, our target for 1970 will be achieved.—[Vol. 785; c. 259–60.]

Mr. Younger: Is it not highly unsatisfactory that three of the major projects included in both the 1963 and the 1966 White Papers have according to the Minister's answer to me, been delayed until 1972 or 1973? Is not that a delay, and may we be told why it has happened?

Dr. Mabon: We have been fortunate with the line of the road in some cases and unfortunate in others. Near my constituency we have had a particularly bad disappointment due to the objections of certain individuals. We cannot get over these difficulties. We have laid down certain rules, and we have to abide by them.

Mr. Gordon Campbell: As my hon. Friend said, the latest White Paper shows that some important sections of dual carriageway trunk road which, according to the 1963 and 1966 White Papers, were to be completed by 1970 will not be completed by then. Is the Minister saying that these delays are entirely due to these procedural hold-ups, and nothing else?

Dr. Mabon: If the argument is mainly about money and Treasury authorisation, the hon. Gentleman is wrong. We have kept within our estimates, and we shall achieve the mileage up to 1970. If the hon. Gentleman would be good enough to put down specific Questions about specific sections of road, I shall try to answer them. I hope that my hon. Friends will ask me all the favourable ones.

Mr. Steele: Is my hon. Friend aware that I have a letter in my file dated 1955 in which it was promised that the double carriageway between Glasgow and Carlisle would be completed in 10 years? We are only getting it done now.

Dr. Mabon: That is entirely due to this excellent Government. I envy my hon. Friend the Under-Secretary who is responsible for the Health Department in answering a Question about the Nine-wells Hospital.

Mr. Monro: asked the Secretary of State for Scotland what steps he is now taking to speed up the construction of motorways and dual carriageways in Scotland; and if he will make a statement.

Dr. Dickson Mabon: Within the limits of available resources the construction of these roads is proceeding as quickly as the engineering problems and the statutory procedures allow.

Mr. Monro: Is the hon. Gentleman aware that in Cmnd. 2864 the Secretary of State said that the major links to the South would be completed by 1970? Is he further aware that the A74 cannot possibly be completed for another two or three years? How does he think those waiting in Glasgow traffic jams this weekend will bless him?

Dr. Mabon: The hon. Gentleman would be the very first to come to the defence of any objectors who raised questions with us about side road orders.


Difficulties have arisen in this matter over side road orders. I am glad to say that on the Scottish side most of our difficulties have been overcome, but on the English side there are difficulties and we must respect the rights of persons concerned. I hope that we shall start construction on this vital section early in 1970.

Mr. Galbraith: asked the Secretary of State for Scotland when he plans to hold a public inquiry into the proposed widening of the Great Western Road, Glasgow.

Dr. Dickson Mabon: This autumn, if necessary.

Mr. Galbraith: Will this inquiry be able to consider the wisdom of widening the road in view of the relief provided by the Clyde and Lomond motorways and in view of the bottleneck which will be created on the eastern stretch of the road for very many years? Will the hon. Gentleman bear in mind the strong feelings not only in the locality but throughout the whole of Scotland that this is an instance where traffic should take second place to people?

Dr. Mahon: The hon. Gentleman is not supported by Glasgow Corporation in his last remarks. There are 135 objections, and the corporation is negotiating with the objectors. If some objections are outstanding, there will be an inquiry and these points will be taken up.

Agricultural Buildings (Rating)

Mr. Stodart: asked the Secretary of State for Scotland for how long he has been considering the issues raised by the rating of certain agricultural buildings and the anomalies which this has created; and when he now expects to make a statement.

The Under-Secretary of State for Scotland (Mr. Norman Buchan): Since these issues were clarified some two years ago following a series of court decisions, the case for a change in the law has been discussed on a number of occasions with the National Farmers Union of Scotland. I have considered their views with great care, and I shall announce a decision as soon as possible.

Mr. Stodart: If it is by any chance a lack of enthusiasm on the part of his English colleagues for a change about which he himself expressed the need for considerable urgency, will the hon. Gentleman recollect that prior to 1956 there was a different form of rating legislation for Scotland? If the worst came to the worst, would he consider separate legislation to clear up this matter?

Mr. Buchan: We are considering every aspect of the problem. It is a very complex one, as the hon. Member knows. As soon as we are ready to announce a decision we will let the House know.

Local Government Ombudsman

Mr. Maclennan: asked the Secretary of State for Scotland if he will now consider introducing legislation to establish an Ombudsman for local government affairs in Scotland.

Mr. Buchan: I would ask my hon. Friend to await the statement promised by my right hon. Friend the Prime Minister in his Answer on 24th June, 1969.—[Vol. 785, c. 1209–10.]

Mr. Maclennan: In view of the negative replies which my hon. Friend has received from local authorities to his inquiries about their having set up complaints offices, does not he agree that in any case it is quite unsatisfactory that members of the public with grievances should have to rely on local authority officials who in many cases are bound to have to act as judges in their own causes?

Mr. Buchan: We fully discussed this point in the House earlier. I reiterated that I thought that this would be a very useful development. I still exhort local councils to carry this through. As to my hon. Friend's other point, we should await developments.

Mrs. Ewing: Can the hon. Member say whether any delay in making use of this excellent proposal is merely out of a consideration of cost, or is there any other reason?

Mr. Buchan: The main problem is one of principle. We are examining this and other aspects of local government, and we shall be examining even more aspects of local government when the Wheatley Report comes out.

Scottish Economy

Mr. Younger: asked the Secretary of State for Scotland what representations he has received concerning the effects of current financial measures on the Scottish economy; and what reply he has sent.

The Secretary of State for Scotland (Mr. William Ross): I have received 11 representations since November, 1968. In the majority of cases the reply emphasised that the financial measures operated since then are necessary to strengthen sterling and to bring the economy into better balance.

Mr. Younger: Does not the Secretary of State recall that answers given to me recently have shown that S.E.T. is a net burden on Scotland of £58 million and that even taking into account R.E.P. the net burden next year will be £18 million? Does this not suggest that those of his hon. Friends who are saying that this is a financial benefit to Scotland have been talking through their hats?

Mr. Ross: I do not think so. The hon. Gentleman over-simplifies the issue. He cannot ignore the overall effect upon the country.

Mr. Grimond: In view of the serious effect of S.E.T. and the increase in S.E.T. on the north of Scotland, can the right hon. Gentleman assure us that evidence relevant to the situation there will be given to the committee which is said to be examining the whole matter?

Mr. Ross: I think that it is a committee of one man. There is nothing to prevent any information being given or forwarded that would be relevant to consideration of this matter.

Mr. Lawson: Will my right hon. Friend bear in mind that in this year and until 1970 the net burden on Scotland will be £8 million, and that immense benefit is coming to Scottish industry, as distinct from some hotels and shops? Will he see that this policy is continued and extended?

Mr. Ross: My right hon. Friend is right to draw attention to the advantages corning to Scotland's manufacturing industry in respect of R.E.P. Bearing in mind that people who are employed in

manufacturing want to maintain and extend their work, other people who are complaining should appreciate that if their customers had no money their businesses would be very much worse off.

Mr. Gordon Campbell: Is it the Government's intention to extinguish small businesses in Scotland? That is what their measures imply?

Mr. Ross: Unlike what happened under the previous Government, it is not out intention to do so.

Private Electricity Meters (Charging)

Mr. Galbraith: asked the Secretary of State for Scotland what evidence he has received of the extent of overcharging where private electricity meters are installed; and if he will make a statement.

Dr. Dickson Mabon: My right hon. Friend has received only a few complaints of overcharging since 1st July, 1965. when maximum resale prices of electricity for domestic purposes were first fixed by the Scottish electricity boards, but the Government are not satisfied with the present arrangements and we are considering what further action is necessary to improve them.

Mr. Galbraith: Is this unsatisfactory state of affairs not due to the fact that so many rents are uneconomical? Would it not be far better to allow a reasonable return in rents and give the electricity boards power to check private meters at the same time as they check the main meters in the houses?

Dr. Mabon: I do not accept the hon. Member's point. However, I concede that we might bring this abuse within the scope of rent restriction. Even though it is a minor matter, the case of Miss Hocking, in Edinburgh, is a shocking one.

Clyde Estuary Development

Mr. Gordon Campbell: asked the Secretary of State for Scotland what consultations he has now had with Scottish local authorities and industry about the potential of the Clyde Estuary to accommodate ships of over 300,000 tons and the consequent prospects of development in that area, in view of the continuing trend towards larger tankers and ore carriers.

Mr. Monro: asked the Secretary of State for Scotland what consultations he has had with local authorities in the Firth of Clyde area with regard to an ore terminal.

Mr. Ross: I refer hon. Members to the comprehensive reply given by my hon. Friend the Minister of State in the debate on 7th July.—[Vol. 786, c. 1012–23.]

Mr. Campbell: Does the Secretary of State not agree that this potential is likely to be of great significance to the Scottish economy, and especially to the steel industry? Since it is apparently taking from March to October simply to consider changing the terms of reference of the Advisory Committee, what is the Secretary of State doing to promote a good planning system for the whole area? This is essential, since a change in local authority organisation and in planning procedures is likely to take several years.

Mr. Ross: If we had taken the advice of some hon. Members opposite and had waited until we had received the report of the Wheatley Commission, it would have taken a great deal longer. What we have done is to bring local authorities together. We have created growth, and there has been more co-operation and co-ordination. If hon. Members opposite were sincere, I am sure that they could have given a little more help. I can think of only one outspoken defence of what was done, and that was put forward by the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor).

Mr. Monro: Most hon. Members thought that the Wheatley Commission would have reported long before now. Is not the hon. Gentleman aware that there is a great deal of concern at the thought that planning may be going on on an ad hoc basis? Surely there should be much more co-ordinated effort between planning authorities on major projects both nationalised and private enterprise.

Mr. Ross: Much of what we have done and are doing in anticipating the coming together of planning authorities could have been done before.

Mr. Galbraith: Instead of getting so angry, could not the right hon. Gentleman use some of his energy to concen-

trate on development in an area which is already industrialised, instead of allowing it to proliferate along a coast of great beauty and tourist value?

Mr. Ross: What makes me slightly angry is the fact that the Opposition speak with two voices. The hon. Member does not want this project to go through. He has said so. This was evident in the speech that he made when we discussed the matter fully.

Public Buildings (Aids for Disabled Persons)

Mr. Gorton Campbell: asked the Secretary of State for Scotland what guidance he has given to local authorities and building agencies in Scotland on the incorporation in public buildings of basic aids for seriously disabled persons.

Dr. Dickson Mabon: Two pamphlets on "Access to Public Buildings for the Disabled" and "Design of Public Conveniences with Facilities for the Disabled" were issued to local authorities in 1965 and 1968 respectively.

Mr. Campbell: Are the Secretary of State and other Ministers concerned satisfied that in all public buildings being designed or built in Scotland there are provisions for at least one point of access for wheel chairs?

Dr. Mabon: I am glad to tell the hon. Member that my right hon. Friend the Minister of Public Building and Works is at present considering revising and reissuing the earlier pamphlet on access in order to bring it home to the disabled and others that these facilities are essential. Statutory responsibility lies with the local authorities, but we have no reason to believe that they are unsympathetic. I should like to look into the point that the hon. Member has raised specifically and write to him about it.

Wick and Thurso (Development)

Mr. Maclennan: asked the Secretary of State for Scotland what action the Highlands and Islands Development Board is taking to follow up the report of the Working Party on the Development of Wick and Thurso; and if he will make a statement.

Dr. Dickson Mahon: The board is working closely with the Caithness county development officer to ensure that sites and facilities are available for such industrial projects as they can attract to the county, and the board has already been authorised to feu land at Ormlie, Thurso, on which to build an advance factory. The board has also lent its support to the purchase by Caithness County Council of 35 acres of land, with buildings, at Wick Airport. Management consultants are being commissioned by the board to help in its efforts to attract fresh industry.

Mr. Maclennan: While I welcome this increased sense of urgency over the need to develop that area, may I ask my hon. Friend whether he would accept that, although there is employment assured at the Atomic Energy Authority Establishment for five years, nothing would so greatly restore the confidence in the potential of the area as a statement from the Government that in principle they accept the long-term need to retain a research establishment there?

Dr. Mabon: I have no doubt that my hon. Friend will have been encouraged by the personal visit of the Prime Minister at the weekend and his subsequent remarks. My hon. Friend should remind his constituents that the working party which has been concerned with this for some time has begun to show positive achievements and is engaged in a number of major surveys concerned not only with industry but with fishing, agriculture and tourism.

Borders General Hospital, Melrose

Mr. David Steel: asked the Secretary of State for Scotland when he expects to announce the starting date for the building of the new general hospital for the Borders on the site recently acquired for the purpose near Melrose.

The Under-Secretary of State for Scotland (Mr. Bruce Millan): I am unable to add to the reply given to the hon. Gentleman on 12th March.—[Vol. 779, c. 285.]

Mr. Steel: Will the hon. Gentleman accept that there is growing concern in the Borders that if economic development goes ahead, as we hope it will, it will

be necessary to replace this old wood-hutted hospital with something approaching modern requirements? Will he accept that the doctors and nurses do a remarkable job in this hospital in what are really very bad sub-standard conditions?

Mr. Millan: I do not know that I would accept the description of this as being a very bad sub-standard hospital. I do agree that this hospital ought to be replaced. We have in mind the economic development in the Borders as one of the factors to be taken into account in determining a priority for it.

Earl of Dalkeith: What capital expenditure has there been on this site so tar, and what does it represent in terms of annual interest so long as it is not built on?

Mr. Millan: About £1,000 per bed has been spent on this hospital in the last twenty years. Compared with other hospitals in Scotland, it has not been badly treated from that point of view.

Scotland-Europe (Direct Communications)

Mr. David Steel: asked the Secretary of State for Scotland whether he will ask the Scottish Economic Planning Board to undertake a study of available facilities for direct travel between Scotland and other European countries and their effect on the Scottish economy with a view to their improvement.

Mr. Ross: This matter is kept under review by the Transport Committee of the Scottish Economic Planning Council.

Mr. Steel: Can the right hon. Gentleman say whether the Transport Committee of the Economic Planning Council has considered the rather ludicrous situation where Loganair is required to charge fares from Glasgow and Aberdeen to Norway based on the assumption that one travels via London? Is this not outrageous? Ought we not to be able to get a fare structure for the flights which the public need direct from Scotland to parts of the Continent?

Mr. Ross: I agree that we want as many direct routes as we can. This is a matter not for me but for the licensing authority. If the hon. Gentleman has any point in mind I would be very glad to have a look at it. We do have the


links, at present, provided by B.E.A., B.U.A., Iberia, S.A.S. Seaboard, Ice-landair, K.L.M. and Panam.

Mr. Dalyell: Since Edinburgh Airport is subject to low cloud and fog, is there not a priority requiring B.E.A. to install automatic landing gear for Tridents at this airport before any other United Kingdom airport outside London?

Mr. Ross: My hon. Friend should put that point to the President of the Board of Trade.

Mr. Grimond: Surely this is a rather ridiculous charging system, and it is a matter for the Secretary of State, representing Scotland? Is it not also an example of the importance of ensuring that when we go into the Common Market, if we do, all travel is not taken through London? Would the right hon. Gentleman agree that if we are to achieve adequate links from Scotland to the Continent, planning must begin now and this ridiculous nonsense of charging must be stopped and the system simplified?

Mr. Ross: I do not know whether it is ridiculous nonsense until I know something about it, and that is why I suggested to the hon. Member that he should write to me.

Teachers

Mr. Rankin: asked the Secretary of State for Scotland what consultations he has had with organisations concerned with secondary school teaching reorganisation; and what plans are being proposed.

Mr. Millan: I have at present no plans to change the organisation of secondary school teaching.

Mr. Rankin: Is my hon. Friend aware that teachers associated with secondary education assure me that the staffing position is not a very happy one and that over any given period of, say, seven years one out of three teachers is now leaving, which in turn is placing a demand upon graduates engaged in the primary schools? Does my hon. Friend not regard that as a serious position, to which he should attend?

Mr. Millan: I know that there are shortages of teachers in secondary schools but recruitment is increasing at the same time. This is true not only of

graduates but of honours graduates entering colleges of education.

Mr. Edward M. Taylor: Has the hon. Gentleman discussed with secondary teachers' organisations the question of the future of the selected schools in Glasgow once fees are abolished? Does he appreciate the very big problems which will arise then, and can he assure us that he will not try to create comprehensive territorial secondary schools in areas where hardly anyone lives?

Mr. Millan: That has nothing to do with the Question on the Order Paper.

Mr. Tom McMillan: asked the Secretary of State for Scotland if he will make a statement on the progress of the scheme for additional payments in areas of teacher shortage.

Mr. Millan: A total of 73 secondary and 80 primary schools, mainly in the west of Scotland, have been designated as schools of severe teacher shortage. Provisional figures for the secondary schools are encouraging. These show that between January, 1968, and January, 1969, the pupil/teacher ratio in the designated secondary schools improved from 22·7 to 21·8 despite a slight worsening of the ratio as a whole in Scotland. I do not as yet have figures for the designated primary schools.

Mr. McMillan: While thanking my hon. Friend for that reply, may I ask him to keep in mind that the scheme should be furthered and its great success in Glasgow borne in mind?

Mr. Millan: This will happen in any case when the present schemes comes to an end in 1971. So far, the results are very encouraging, and it is something of which we want to take account in our future planning for teacher supply.

Mr. MacArthur: Does the hon. Gentleman recognise that, while these results are encouraging, any suggestion of direction of teachers would be totally unacceptable?

Mr. Millan: This is not a question of direction; it is a question of giving financial encouragement to teachers to go to the schools where the shortage is most acute. I should have thought that that would be acceptable to all sides of the House.

Mrs. Ewing: asked the Secretary of State for Scotland how many persons have now been turned down by reference panels for registration with the General Teaching Council in Scotland; and now many such persons are now in the employment of Scottish education authorities in schools, specifying the number in each authority and the jobs these persons are engaged to do.

Mr. Millan: The hon. Lady is confusing different things. Reference panels are concerned not with the registration of teachers, but only with temporary appointments of unregistered teachers.

Mrs. Ewing: Does the Minister think that that is a satisfactory reply? Is he aware of the concern of the Educational Institute of Scotland in the matter; and that the Lanarkshire section of the Educational Institute asked for the question to be raised in Parliament? Is he not aware that there is a belief that if that has happened, and we have not heard, it looks like the back-door entrance of unqualified staff?

Mr. Millan: Whatever the E.I.S. in Lanarkshire may have done, it has not asked for this Question to be put on the Order Paper because, obviously, the Question shows lack of understanding of the purpose of the reference panels. If the hon. Lady referred to the situation in Lanarkshire, where there is controversy about the continued employment of unregistered teachers who have been disqualified by the reference panels, I must say that I have already met the education authority and have obtained what I think are satisfactory assurances on these matters.

Mr. James Hamilton: Will my hon. Friend also tell the House that I wrote to him, and that I received a reply from him acceptable to Lanarkshire teachers, and particularly the Lanarkshire section of E.I.S.?

Mr. Millan: I am glad to hear that.

Mr. MacArthur: asked the Secretary of State for Scotland how many teachers in schools had not re-registered with the General Teaching Council at the latest convenient date; and if he will make a further statement.

Mr. Bruce-Gardyne: asked the Secretary of State for Scotland what is his latest estimate of the number of teachers

currently employed in schools in Scotland, who have failed to register with the General Teaching Council since 1st April 1969; and if he will state the numbers in this category employed by each local authority in Scotland, respectively.

Mr. Millan: I have not asked education authorities for the information that would be needed to bring up to date the figure of 2,139 at 1st July that I announced during the Estimates debate in the Scottish Grand Committee on 3rd July. As regards the situation generally, I have nothing to add to the reply given to the hon. Member's Question of 25th june.—[Vol. 785, c. 277.]

Mr. MacArthur: Will the Minister agree that the constructive course for teachers to take is probably to re-register pending the outcome of the present review? Would he also agree that he cannot allow the present position to drag on, and that the final decision must be seen to be equitable and fair to those teachers who were dismissed earlier this year?

Mr. Millan: I certainly agree that those who are not registered or who have not re-registered should do so now. The figures of registrations have gone up by 673 in the last fortnight since I announced the previous figures. I agree that the matter of equity between teachers dismissed last year and those not registered this year has to be borne in mind. I also have no wish that this matter should drag on indefinitely.

Several Hon. Members: rose—

Mr. Speaker: Mr. Hannan.

Mr. Bruce-Gardyne: On a point of order, Mr. Speaker. I have Question No. 73.

Mr. Speaker: A late question does not entitle the hon. Gentleman to be called. Mr. Hannan.

Mr. Hannan: Will my hon. Friend make it known that this is essentially a matter for the teachers themselves to resolve? Will he also try to make it clear that my right hon. Friend the Secretary of State should not be seen to be carrying the responsibility for untoward things that happen as a consequence?

Mr. Millan: The responsibility for dealing with teachers who have not registered is certainly with the local education authorities. There is also now the question of general support for the


General Teaching Council. The continuing responsibility is on the teachers individually and through their associations, and I certainly would not wish to derogate from that responsibility.

Mr. Bruce-Gardyne: The Minister has referred to the inequity as between those teachers sacked last year and those who have not been sacked this year although they committed precisely the same supposed technical offence, but does he intend to do something about equity? Does he also intend to do something about the situation in which every local authority is in breach of the law, and has been in breach of the law since the beginning of May?

Mr. Millan: I did not mention any inequity at all. What I said was necessary was the maintenance of equity between the two years.

Mr. Dewar: asked the Secretary of State for Scotland what progress has been made with the discussions with local education authorities following the publication of the recent report on secondary school staffing.

Mr. Millan: Copies of the memorandum "Staffing of Secondary Schools in Scotland" and of my Department's Circular 714 were sent to all education authorities and to the teachers' and local authorities' associations. I have received comments from some of these bodies. I am arranging a series of discussions with interested bodies in the early autumn.

Mr. Dewar: Does my hon. Friend accept that everyone in Scotland is anxious to see the Government, particularly by a set of incentives, tackling the problems of staffing in the less fortunate areas, but will he also accept that there is anxiety in areas such as Aberdeen that it may be in the mind of the Government to impose ceilings which would not permit the maintenance of the present excellent staff-pupil ratio in this area? Has he anything to say to reassure us?

Mr. Millan: I do not want to add anything at the moment to the scheme adumbrated in Circular 714 but we are anxious to have a scheme of distribution which will improve the position in areas which at present suffer from an acute teacher shortage.

Mr. MacArthur: Will the hon. Gentleman now answer the question I put to him earlier? Will he give the House an

assurance that there is no question of direction of teachers being resorted to to ease the shortage in these difficult areas?

Mr. Millan: I have answered that already; there is no question of direction.

Music (Grants)

Mr. Tom McMillan: asked the Secretary of State for Scotland what grant and guarantees were made to the Scottish Arts Council in respect of music throughout Scotland for the years ended March, 1968, and March, 1969; and how these figures compare with those for the financial years ended March, 1963, and 1964.

Mr. Millan: As the Answer includes a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.

Mr. McMillan: I thank my hon. Friend for that reply.

Following is the information:


Year (1)
Total Allocation to Scottish Arts Council from Arts Council of Great Britain (2)
Grants by Scottish Arts Council to Music (3)



£
£


1962–63
144,666
44,337


1963–64
174,600
65,600


1967–68
707,700
198,833


1968–69
795,000
257,425



(provisional)
(provisional)

Figures in col. (2) for 1967–68 and 1968–69 include £77,700 and £90,000 respectively from the "Housing the Arts" fund.

Herring Board

Mr. Clark Hutchison: asked the Secretary of State for Scotland if he will take steps to increase his power of supervision over the activities of the Herring Board, particularly where staff is concerned.

Mr. Buchan: No, Sir. Ministers' powers are in general adequate, and as regards staff I consider that the board should be responsible for its own arrangements.

Mr. Clark Hutchison: If an injustice arises one must deal with the board. Should there not be some system of appeal or supervisory arrangements whereby an outside body or person can give a final answer?

Mr. Buchan: I know that the hon. Member is referring to a specific case, and that he may be meeting the chairman of the board to deal with the case. The


statutes are clear. It is the function of the board to look after certain aspects. I know something of the situation. As I understand it, the decision was in line with the requirements of the statutes.

Housing

Mr. Edward M. Taylor: asked the Secretary of State for Scotland how many houses have been started and completed, respectively, in Scotland in the first six months of 1969; and what were the comparable figures for the first six months of 1968.

Dr. Dickson Mabon: The precise figures will not be available until later this month. In the corresponding period last year 21,509 were started and 18,573 completed.

Mr. Taylor: Would the hon. Gentleman agree that the figures for starts and for completions will be down, and, bearing in mind the figure for starts so far this year, when does he think that his specific pledge of 50,000 houses by 1970 will be achieved?

Dr. Mabon: The hon. Gentleman is terribly out of date. I cannot give precise figures. When he sees the figures for the second quarter, he will find a substantial improvement on the first quarter, bringing us very close to the figures for 1968, a record year. We shall expect from him his usual congratulatory telegram praising the Government for their superior housing record over that of the Conservatives.

Mr. Buchanan-Smith: Would not the hon. Gentleman agree that the alarming thing about the housing figures is the much bigger proportional fall in starts than completions compared with last year? Does not this make his target for 1970 an absolute dead duck?

Dr. Mabon: The hon. Gentleman has not seen the figures for the second quarter, so how can he make these assertions? We have constantly warned him not to calculate performance on one quarter. I expect him also to send a telegram to us.

Mr. James Hamilton: asked the Secretary of State for Scotland what was the total value of the standard improvement grant and the discretionary grant,

respectively, over the past four years in Lanarkshire County Council.

Dr. Dickson Mabon: With permission, I will circulate the figures in the OFFICIAL REPORT.

Mr. Hamilton: Obviously I do not know what the figures are. Will my hon. Friend give thought and consideration to enlarging this scheme whereby other householders who do not qualify at present could come into it and, as it were, save some of the houses which are badly needed in Lanarkshire?

Dr. Mabon: My hon. Friend will be proud to know that Lanarkshire County Council on standard grant has more than doubled the grants paid in 1965 and discretionary grants over the last three months were 15 per cent. up. As he knows, we debated the Housing (Scotland) Bill recently, and we shall be issuing a guide book on the matter.

Following are the figures:



Standard Grant (amounts paid) £
Discretionary Grant (amounts approved) £


1965
2,782
11,720


1966
5,935
21,660


1967
4,488
18,889


1968
6,719
13,757

Mr. Hannan: asked the Secretary of State for Scotland how many houses for sale have been built in Glasgow for each of the last three years.

Dr. Dickson Mabon: 57, 93 and 77 respectively.

Mr. Hannan: Do not those figures demonstrate the great shortage of land for building within the City of Glasgow? Does this not emphasise the need for Glasgow Corporation to move and agree in the matter of the Erskine development for both private and public building?

Dr. Mabon: Yes, I quite agree with my hon. Friend, and I hope that the corporation will allow us to get on with the development in Erskine.

Mr. Galbraith: On the availability of land, does not the hon. Gentleman agree that the very low level of rents discourages people from providing houses for themselves?

Dr. Mabon: If the hon. Member acquainted himself with present-day facts about housing in Scotland he would know


that one of the complaints of private developers in Scotland is lack of land and that my hon. Friend the Member for Glasgow, Maryhill (Mr. Hannan) was on a good point when he spoke about land at Erskine because there is land for 4,000 houses there.

Mr. Hugh D. Brown: Will my hon. Friend institute inquiries into the social problems which spring from lack of facilities to provide land for owner-occupation housing?

Dr. Mabon: We have much evidence about this already before the Scottish Housing Advisory Committee. We want to see an increase in house building in both the private and the public sectors.

Part-time Education

Mr. Edward M. Taylor: asked the Secretary of State for Scotland how many pupils in Scotland were receiving part-time education at the latest date for which figures are available; and what percentage of this total was at Glasgow schools.

Mr. Millan: 11,785 in the week ending 30th May, of whom 55 per cent. were in Glasgow schools.

Mr. Taylor: Does the hon. Gentleman agree that Glasgow is still carrying far more than its fair share of part-time education? Will he at least give an assurance that he will bear these rather worrying statistics very much in mind when considering the possibility of teachers being suspended because of the G.T.C. issue?

Mr. Millan: I do not think that the G.T.C. issue arises out of the Question, but the position in Glasgow is still worrying. The figures which I have just given for Glasgow are affected by a fairly large number in primary schools. This year there has been a change in arrangements. The second transfer to secondary schools has been discontinued, but there is still a second entry in primary schools, which means that there have been particular difficulties this year. I hope very much that they will not be repeated in subsequent years.

Mr. Lawson: Is not a large part of the difficulty in Glasgow due to the fact

that a very substantial number of teachers prefer to teach in the agreeable areas and schools and will not go to the difficult areas where they would be very valuable?

Mr. Millan: That may be a factor. So far as it is, the scheme for inducement payments to which I referred previously is an important element in putting the question of distribution on a more satisfactory basis.

Plant and Machinery (Investment)

Mr. Rankin: asked the Secretary of State for Scotland if he will state the amount of investment in plant and machinery in Scotland for the first half of 1969; and how this compares with the same period in 1968.

Mr. Ross: Half-year figures are not available; the amount of investment in plant and machinery in Scotland in 1968 will be published in the October issue of the Digest of Scottish Statistics.

Mr. Rankin: I am sorry that my right hon. Friend has imparted so little information. I had read that there was a fall in investment over last year, but, as one may assume at least constant investment, should not one expect the population, instead of shrinking, as it appears to be doing, to begin to show an increase, too?

Mr. Ross: I think that my right hon. Friend is referring to a survey by the C.B.I. which referred to the possibility of a fall in relation to plant and machinery.

Mr. Rankin: Yes, I am.

Mr. Ross: The same survey suggested that there would be a proportionate increase in investment in buildings. It is a very complex business, and expectations are not always borne out by facts. We shall need to watch the matter. Population is being held at the moment.

Mr. Younger: Is not this anxiety about a fall in investment a very serious matter for the Scottish economy? If it is, does it not indicate that R.E.P. is not doing what the Secretary of State claimed it could do; namely, increase investment in machinery?

Mr. Ross: If the hon. Gentleman looks at the statistics on plant and machinery published by the Board of Trade and at the published Scottish statistics, he will find that, compared with the time when the Conservative Party was in office, every year has been a record year for investment in plant and machinery under the Labour Government. I am glad to say that the figures for 1968, which will be published later, will show an improvement over the previous year.

Mental Hospital Patients

Sir M. Galpern: asked the Secretary of State for Scotland what proportion of patients in Scotland is in mental hospitals at the latest convenient date; and how this figure compares with the average for the last five years.

Mr. Millan: The average number of patients in mental hospitals during the year to 31st March, 1968, represented 33·01 per cent. of the average number of patients in all hospitals; the average during the five years to 31st March, 1967, was 34·16 per cent. If mental deficiency hospitals are included, the figures are 44·52 per cent. and 44·76 per cent.

Sir M. Galpern: Would my hon. Friend agree that these figures are disturbing? Would he ascribe the very high percentage of inmates in mental hospitals to the increased alcoholic drinking habits of the people and the strains and stresses of the ever-quickening pace of modern living? What steps have been taken to investigate this very serious illness among the population in Scotland?

Mr. Millan: The figures has not increased proportionately; they have remained about the same. The numbers of patients being admitted to mental hospitals with a diagnosis of alcoholism have gone up and they now represent about a quarter of all male mental hospital admissions. This is a very worrying factor indeed. A good deal is being done in the health education and other fields on this problem.

Mr. Edward M. Taylor: Would not the hon. Member agree that one of the reasons for the high figures is that so many beds in these hospitals are full of geriatric patients simply because there is nowhere else for them to go? Would he

agree that the figures could be substantially reduced if we concentrated on making proper provision for geriatric patients?

Mr. Millan: The provision of geriatric beds in the hospital service has been very substantially increased in the last few years. The effort of local authorities on community services for mental deficiency has increased very considerably in recent years. But the total numbers and the proportion are not increasing. That does not mean that we are happy that we have the right balance between hospital and community provision. I should like to see the balance tilted towards the latter rather more than it is.

Surgical Transplants

Sir M. Galpern: asked the Secretary of State for Scotland if he will list in the OFFICIAL REPORT details of all surgical transplants carried out in Scotland during the last year.

Mr. Millan: I will, with permission, circulate in the OFFICIAL. REPORT a detailed list of all surgical transplants carried out in Scotland during the year ending 30th June, 1969. There were 15, all renal transplants.

Sir M. Galpern: I thank my hon. Friend for his reply and look forward to reading the information in the OFFICIAL REPORT. Has he formed any view on the recent report of the MacLennan advisory group on transplants in general, and, in particular, has he any views on the creation of a central register of donors who can contract in for transplants?

Mr. Millan: It is a little early for the Government to take definite views on these matters. We were very anxious that the report should be published so that we could test public reaction to it. The comments in the Press have been very valuable from that point of view. But we should like to have more idea of the general feeling before coming to any firm decisions.

Mr. Brewis: Why have the Government done so little to encourage people voluntarily to allow their organs to be used after death for transplant surgery?

Mr. Millan: I am not sure that that is an accurate comment. I think that the


report of the MacLennan Committee deals with this kind of development as well as

Following is the list:


SURGICAL (RENAL) TRANSPLANTS CARRIED OUT IN SCOTLAND DURING YEAR ENDING 30TH JUNE, 1969





Date of Operation
Number of Transplants
Location



July, 1968
…
…
…
1
Nuffield Unit, Western General Hospital, Edinburgh.



August, 1968
…
…
…
1
Nuffield Unit, Western General Hospital, Edinburgh.



November, 1968
…
…
…
5
Nuffield Unit, Western General Hospital, Edinburgh.



December, 1968
…
…
…
2
Nuffield Unit, Western General Hospital, Edinburgh.



January, 1969
…
…
…
1
Nuffield Unit, Western General Hospital, Edinburgh.



May, 1969
…
…
…
1
Nuffield Unit, Western General Hospital, Edinburgh.



May, 1969
…
…
…
1
Royal Infirmary, Glasgow.



May, 1969
…
…
…
1
Western Infirmary, Glasgow.



June, 1969
…
…
…
2
Nuffield Unit, Western General Hospital, Edinburgh.







15

Marriage Law (Kilbrandon Committee's Report)

Mr. Dewar: asked the Secretary of State for Scotland what plans he has to implement the proposals of the Kilbrandon Report on the Marriage Law of Scotland.

Mr. Buchan: My right hon. Friend is in the process of seeking views on the report from the churches, the local authority associations, bodies representing the legal profession, organisations in the social field and the Governments of several European countries. When these consultations have been completed, he will decide what action should be taken on the committee's recommendations.

Mr. Dewar: Will my hon. Friend ensure that these consultations do not take too long, as consultations on similar matters have sometimes taken in the past? Will he accept that the report contains a very large number of useful references in an important field of law, and is right to emphasise the need to deal with the rather sad and tarnished trade in runaway marriages which continues to lead to embarrassment and complications in our courts?

Mr. Buchan: The organisations we are consulting have been asked to let us have their views by 30th September next. At that point, we shall be able to decide whether legislation is necessary and, if so, the form that the legislation should take. It would not be proper for me to comment on the various aspects of the report, but my hon. Friend is right to draw attention to the report.

Legal Aid Scheme

Mr. Dempsey: asked the Secretary of State for Scotland if he will take steps

others. There are limitations on the point which the hon. Gentleman mentions.

to extend the Legal Aid Scheme to special cases being tried in burgh and justice of the peace courts; and if he will make a statement.

Mr. Buchan: I regret that there is no prospect, in the present economic situation, of an extension of the Legal Aid Scheme to such proceedings.

Mr. Dempsey: Will my hon. Friend at least keep the matter within his view? Is he aware that there are some genuine cases in which legitimate defences cannot be properly argued because of insufficient financial resources to employ the necessary legal representatives for that duty? Will he bear that point in mind when considering any future liberalisation in policy?

Mr. Buchan: We will take all aspects into account.

Mrs. Ewing: Apart from the question of expense, does the hon. Gentleman take the point that these courts are often those in which members of the public come up against the force and majesty of the law for the first time, and that it might be more important to ensure that no one is denied legal representation through lack of funds in these courts more than in any other court?

Mr. Buchan: I agree with the first half of the hon. Lady's supplementary question: I disagree with the second half.

Primary Schools (Closures)

Mr. James Davidson: asked the Secretary of State for Scotland what is his policy towards the closure of single-teacher primary schools in remote rural areas; and if he will make a statement.

Mr. Millan: Any proposal of an education authority for the closure of a


school requires my right hon. Friend's approval, and he considers each case on its merits. In general, children are believed to gain social and educational advantages from being taught in a larger school community and in more homogeneous age groups than obtain in one-teacher schools, but other factors such as the condition of the existing buildings, the availability and economic use of teachers, the distances which children would have to travel, and the wishes of parents are also taken into account.

Mr. Davidson: I thank the Under-Secretary of State for his reply. I am well aware of his views on the subject. Will he confirm that he agrees that where the closure of such schools might lead to difficulty and danger to young children travelling in winter conditions, those schools should be maintained, if possible, even though the cost appears to be unjustified?

Mr. Millan: I certainly take the view that traffic conditions involving any question of danger to the children concerned are a very important factor to be borne in mind in any such proposal.

Mr. Rankin: Has my hon. Friend ever given any thought to the employment of small aircraft in order to obviate altogether the necessity for this type of school?

Mr. Millan: No, Sir. I must confess that I have never given it any thought.

General Teaching Council

Mrs. Ewing: asked the Secretary of State for Scotland if he will make a statement on the progress of the review of the General Teaching Council.

Mr. Ross: I have nothing to add to my reply of 1st July to the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor).—[Vol. 786, c. 72.]

Mrs. Ewing: In view of the urgency of the situation in that some hundreds of teachers have not registered under the G.T.C., will the right hon. Gentleman promise to press for a review in order to try to keep every one of these vital teachers on the payroll?

Mr. Ross: It is not a question of my pressing for a review; I have instituted the review. I have received representations from many organisations and individuals in respect of many aspects of the G.T.C. The final date for the receipt of

representations was 30th June, but I am not being entirely rigid about that. If anyone has missed the date, I shall still be pleased to hear from him. I hope to make a statement on this subject, probably in the autumn.

Mr. MacArthur: Will the Secretary of State assure the House that he will treat this review with the utmost possible urgency in view of the need, as soon as possible, to assist in the harmonious establishment of the G.T.C.?

Mr. Ross: Yes, Sir. But I do not think that in this case speed is necessarily the right thing. We want urgency in relation to the adequacy of consultation and the depth of consideration to be given.

Employment Target

Mr. MacArthur: asked the Secretary of State for Scotland if he will make a further statement about the progress achieved in meeting the 1970 employment target set out in e White Paper, The Scottish Economy 1965–70.

Mr. Ross: I have nothing to add to the reply which I gave the hon. Gentleman on 12th March.—[Vol. 779 c. 280.]

Mr. MacArthur: Is not the Secretary of State yet aware that there are now 35,000 fewer jobs in Scotland than four years ago?

Mr. Ross: I have already pointed out to the hon. Gentleman that in respect of the targets we have come well up to the provision of new jobs. I have also stated that we have been subjected to a far speedier rundown of the older industries of mining, railways, agriculture and the rest than was expected.

Radiographers

Mr. Adam Hunter: asked the Secretary of State for Scotland what is the total amount of radiographers currently employed in the hospital service; and how this compares with the last five years.

Mr. Millan: At 30th September, 1968 radiography staff employed in the hospital service in Scotland numbered 550 in whole-time equivalent. The corresponding figures for preceding years were 543 in 1967, 538 in 1966, 516 in 1965, 494 in 1964 and 504 in 1963.

Mr. Hunter: Is my hon. Friend aware that for the past few years there have


been serious staffing difficulties in radiography departments in certain parts of Scotland? Does his answer mean that these problems will be overcome?

Mr. Millan: I am not aware of any general staffing problems of radiographers. We do not keep a general register of vacancies in the service. If my hon. Friend knows of any particular difficulties in hospitals which he has in mind and will let me know, I will look into them.

Drugs

Mr. Adam Hunter: asked the Secretary of State for Scotland what was the cost of drugs in Scottish hospitals in the periods 1960 to 1964 and 1964 to 1968, respectively.

Mr. Millan: £6,036.907 in the four years to 31st March, 1964, and £8,046,312 in the four years to 31st March, 1968.

Mr. Hunter: Can my hon. Friend say whether the increased costs are due to higher prices or a greater amount of drugs being used? In either event or in both, does he say that this is an improvement in the quality of the National Health Service?

Mr. Millan: I certainly think improved drugs coming forward all the time mean an improvement in the quality of the service which the National Health Service is able to give to patients. Some of these increases, of course, arise from increases in costs, but others for the other reasons mentioned by my hon. Friend.

Mr. William Hamilton: Will my hon. Friend say whether there is any machinery in the Scottish Health Department to supervise and inquire into the profit margins of the firms supplying the drugs?

Mr. Millan: There is, of course, machinery on a United Kingdom basis for looking into drug costs generally both in the hospital service and in the general practitioner service. This was dealt with at considerable length in the Sainsbury Report and in the reply which the then Minister of Health gave on behalf of both Departments in response to the recommendations of that report.

Mr. Woodburn: Is my hon. Friend aware that increase in the cost of drugs is not always a waste as general practitioners are often able to treat their patients at home with new drugs and thus

save the expense of sending patients to hospital?

Mr. Millan: I certainly agree that not all increased expenditure on drugs is by any means a waste. On the other hand, we want to keep drug costs down to a reasonable amount and we do not want to see excessive prescribing of drugs or the wasted use of drugs.

Kirklands Hospital, Bothwell (Minister's Visit)

Mr. James Hamilton: asked the Secretary of State for Scotland if he will make an official visit to Kirklands Hospital, Bothwell, in the light of the information given to him by the hon. Member for Bothwell.

Mr. Millan: I hope to do so later this year.

Mr. Hamilton: I thank my hon. Friend for that reply. I am quite sure that the information I have given him verbally and also in writing will bear fruit when he visits this hospital, and I hope that at the end of the visit—[HON. MEMBERS: "Question."]—he will come to the same conclusion as I came to long ago.

Mr. Speaker: Order. The hon. Member should ask a question.

Maternity Beds (Glasgow)

Mr. Hannan: asked the Secretary of State for Scotland what is the present maternity bed provision in Glasgow; how this compares with five years ago; and what provision is being made for future requirements.

Mr. Millan: 770 beds. On 31st December, 1963, 765 beds were available for Glasgow mothers; since then 136 new beds have been provided, replacing older accommodation. About 90 per cent. of Glasgow births are now in hospital, and estimates of future needs suggest that the main effort should continue to be on the provision of replacement beds. A new 110-bed unit to be opened at the Southern General Hospital later this year includes 63 replacement beds.

Mr. Hannan: May I congratulate my hon. Friend on the magnificent achievement in this field as in many others since the advent of this Administration? Can he now give an assurance that at long last the qualifications in the Montgomery Report are being met in respect of Glasgow?

Mr. Millan: They are more than being met. The Montgomery Committee recommended that there should be 75 per cent. of confinements in hospitals; and in Glasgow there are about 90 per cent. and in Scotland as a whole about 92 per cent. confinements in hospitals.

Fishing (Hunter Report)

Mr. Dalyell: asked the Secretary of State for Scotland when he now expects to present a Green Paper or White Paper on the Hunter Report on Fishing.

Mr. Buchan: I regret that my right hon. Friend's consideration is not yet far enough advanced to enable him to say when he will be able to announce his conclusion.

Mr. Dalyell: Will it be before Christmas?

Mr. Buchan: I must advise my hon. Friend to wait with as much patience as he can muster.

Mr. Gordon Campbell: As the report was presented more than three years ago, are the Government already treating it as an archive, or are they giving it proper consideration?

Mr. Buchan: Of course we are giving it proper consideration. I repeat the advice I gave to my hon. Friend to the hon. Member, some of whose colleagues were not quite so quick on the equivalent Bledisloe Report. which came out before this report.

Departmental Land

Mr. Dalyell: asked the Secretary of State for Scotland whether he will make a survey of lands in the possession of the Scottish Home and Health Department, the Scottish Education Department and other departments of the Scottish Office, with a view to making a better economic use or sale of potential building land for which he is responsible, and which is currently underdeveloped.

Dr. Dickson Mabon: The land holdings of my right hon. Friend's Departments are kept under regular review.

Mr. Dalyell: Is my hon. Friend satisfied that the Scottish Office has sufficient incentive to disgorge surplus land?

Dr. Mabon: My right hon. Friend the Secretary of State has written to my hon. Friend the Member for West Lothian (Mr. Dalyell) on this subject today.

North-West Atlantic Fisheries (Warsaw Convention)

Mr. W. H. K. Baker: asked the Secretary of State for Scotland if the Department of Agriculture and Fisheries for Scotland was represented at the recent Convention of the International Commission for the North-West Atlantic Fisheries held in Warsaw; and if he has received a copy of the proceedings.

Mr. Buchan: The Department was represented, and I am, of course, aware of the results of the meeting; but the Commission's report of the proceedings has not yet been received.

Mr. Baker: Is it not a fact that only one country voted against a ban on fishing salmon off Greenland? Will the hon. Gentleman make representations to the Foreign Secretary to bring all pressure to bear against that country to get it to ban as well as the rest of the signatories?

Mr. Buchan: ; All my relevant colleagues are well aware of the position which the hon. Member has outlined.

Mr. Maclennan: Will my hon. Friend say what action the Government propose to take to bring to the notice of the Danish Government the very strong feelings throughout Scotland, in particular, about their reluctance to adhere to the proposals put forward in Warsaw?

Mr. Buchan: I prefer not to answer that, but the problem is known, our attitude is known and we have made our attitude very forcibly known to all the Governments concerned.

Industrial Fishing

Mr. W. H. K. Baker: asked the Secretary of State for Scotland what plans he has for the assistance of the fishing industry to undertake industrial fishing; and if he will make a statement.

Mr. Buchan: The issistance given by way of white fish subsidy has already been extended to cover industrial fishing, and some landing restrictions have been eased. Further measures will depend on the result of investigations now in progress.

Mr. Baker: Would not further assistance in this connection help to ease our balance of payments problem in that more industrial fishing could be carried on?

Mr. Buchan: I am well aware of the importance of this matter and, as the hon. Gentleman knows, I have been giving a good deal of consideration to it. It was partly with the import saving aspect in mind that we have made the improvements we have done.

Mr. Stodart: Will the Under-Secretary undertake to treat this matter with more urgency that he has the Hunter Report? Is he aware that imports of fish meal amount to 86 per cent. of our total consumption and that there is great room for import saving here?

Mr. Buchan: I will certainly undertake to give it exactly the same urgency as I have given to the Hunter Report—that is, considerable urgency.

OVERSEAS REPRESENTATION (REPORT OF REVIEW COMMITTEE)

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Michael Stewart): With your permission, Mr. Speaker, and that of the House, I should like to make a statement on the Report of the Review Committee on Overseas Representation, which has today been laid before the House.
The House will recall that last August I invited Sir Val Duncan, Sir Frank Roberts and Mr. Andrew Shonfield to report urgently on the means of obtaining the best value for money from our overseas representation, having regard to our foreign and defence policies and the economic situation and all that these imply for Britain's rôle in the world.
Their report is far-ranging and draws many important conclusions. These concern a wide variety of matters, from broad issues of policies and priorities to quite detailed points of management. Some of them concern questions which lie outside my direct responsibility. Some are very much in line with thoughts and practices which we ourselves had been developing; others—and I very much welcome this—are novel and suggest new departures in ways of handling the problems concerned.
While the Government warmly welcome the Committee's general approach, my colleagues and I feel that before we can give a specific endorsement to its conclusions, we need to go further into their probable consequences, their

implications for the standard and range of our services overseas, and their effect on foreign policy as a whole.
The publication of the report will give many persons inside and outside this House an opportunity to consider these issues. I do not think that it would be right for the Government to commit themselves too deeply before they have had the benefit of this opportunity. I have, therefore, initiated studies and consultations on the report. These include discussions with the appropriate staff associations.
At the same time, I should like to say that I very much welcome the tribute which the Committee has paid to the high standard of our overseas services, and particularly to the competence and adaptability of Her Majesty's Diplomatic Service.
I am sure that the House will join me in thanking Sir Val Duncan and his colleagues for devoting so much of their time to this important task, which they discharged speedily and thoroughly. They have produced a penetrating and objective survey, which has already had a valuable effect in stimulating our own consideration of these problems, and which will be an essential guide through the challenging years ahead.

Several Hon. Members: rose—

Mr. Speaker: Order. I remind the House that we have a mass of important business ahead. There can be only a few questions, and brief ones.

Mr. Wood: I join the Secretary of State in his expression of gratitude to Sir Val Duncan and his colleagues. Am I right in assuming that it is their full report which has been laid before the House? Is the right hon. Gentleman aware that we shall need time to study the Committee's conclusions, as he suggested, because it is rather difficult from his statement to gather anything that might be in the report?
Although it is clearly right that we should re-examine the needs of our representation abroad, we shall obviously want to consider the particular proposals that are made in the report. Will the levels of any compensation necessary be sufficient to maintain morale in the Service which is obviously essential if, in the right hon. Gentleman's own words, "the high standard of our overseas services" is to be maintained?

Mr. Stewart: There is a sentence on the first page of the report which explains that the
published version of the Report includes the full text as originally submitted with the exception only of certain specific references which it was agreed with the Committee should be omitted on security and similar grounds. These omissions are of small significance in the context of the Report as a whole…"
On the second and main point, I accept that my statement does not inform the House of everything that is in the report; nor, without unduly trespassing on the patience of the House, could it have done so. What I wanted to do in this statement was to explain our agreement with the report's general approach and the fact that before specific recommendations could be endorsed it was necessary for the Government to have opinions from people both inside and outside the House; and for that purpose we have been having consultations.
I am well aware that the question of redundancies is important. It is clear that, if we proceed on the general lines of the report, within measurable time the total size of the Diplomatic Service will be less than if there had been no such report. Indeed, as hon. Members will see when they study the report, this would involve substantial savings, but whether this means redundancies or whether it can be achieved by the ordinary process of retirement cannot be definitely stated at this stage. The question of compensation for redundancy is being considered as part of the current review of Civil Service superannuation.

Mr. Driberg: Would my right hon. Friend consider that the very fact of military withdrawal from east of Suez, which is fully supported on this side of the House, may itself make it more necessary that we should retain a strong diplomatic and what might be called a cultural presence in many countries throughout the world, not least in the Commonwealth?

Mr. Stewart: My hon. Friend will find that the central proposition of the report is this. First, that it is both possible and desirable to secure a reduction in the total membership of the Diplomatic Service. Secondly, that in deciding how that is to be done the criterion must always be the relevance of the mission in any

particular part of the world to the interests of Britain, regarding as our dominant interest at the present time the maintenance of our commercial interests and the improvement of our balance of payments. This is the general approach of the report, and I believe it to be a right one.

Mr. James Davidson: Does the Secretary of State agree that on the whole our missions abroad are somewhat lavishly staffed by comparison with comparable countries, such as West Germany and France? In view of the increased emphasis on commercial representation, what is the right hon. Gentleman's attitude to the seconding of personnel from the Foreign and Commonwealth Affairs Service to industry and vice versa?

Mr. Stewart: I do not think that the hon. Gentleman's suggestion about staffing can be borne out. I do not think that a reading of the report will support it.
We hope to arrange the type of exchange referred to by the hon. Gentleman and are considering what can be done about it.

Mr. Philip Noel-Baker: As one who has spent a good many years of his life in the Foreign Office, may I endorse the Foreign Secretary's tributes to the work of the Diplomatic Service in times gone by? Will he assure us that the House will have an opportunity of debating the report before the Government implement it?

Mr. Stewart: The question of a debate is not for me. I made my statement today, in effect, to invite study of and comment on the report, and I very much hope that in due time there will be opportunity for the House to consider it more fully.

Mr. Eldon Griffiths: Will the Foreign Secretary accept that many of us who have high regard for Sir Val Duncan nevertheless question some of the major premises in his report? In particular, will the right hon. Gentleman tell the House now whether the report says, among other things, that the Government are guilty of ambiguity of intention in their foreign and defence policies? Is this, perhaps, one of the reasons why his statement has been so unforthcoming today?

Mr. Stewart: No, Sir; it is now open to all hon. Members to read the report, and I do not think that they will reach the conclusion which the hon. Gentleman reaches.

Dr. John Dunwoody: Can my right hon. Friend comment on reports that the Duncan Committee suggested that the British Council should have a much larger and more significant rôle to play, particularly in cultural exchanges and information services?

Mr. Stewart: I do not want to be drawn into trying to give summaries of matters in a report which hon. Members will wish to read in detail. Several recommendations are made about the activities of the British Council which we shall wish to discuss with the Council.

Sir C. Mott-Radclyffe: Now that the Diplomatic Service has been subjected twice in five years to a major inquiry, the first being the Plowden Commission and the second being the Duncan Committee, and both those inquiries having rightly paid a warm tribute to the work of the Service, would it not now be the best thing to allow the Service to get on with its work quietly, without any further committees of inquiry in the offing?

Mr. Stewart: After this report, which hon. Members will realise, when they come to study it, is a very impressive piece of work, I can see no ground for further inquiry for some considerable time to come.

Mr. Luard: The Press has reported, and the Foreign Secretary has tended to confirm today, that the report recommends a concentration of our diplomatic effort in Europe and in North America. Although there may well be economies to be made by concentrating some diplomatic activity for more than one country in a single embassy, would it not be disastrous, especially as we are now withdrawing militarily from Asia and other parts of the world, as my hon. Friend the Member for Barking (Mr. Driberg) pointed out, if we were to neglect the importance of continents such as Africa, Asia and Latin America at present simply because our commercial interests are concentrated in North America and Europe?

Mr. Stewart: I am sure that it is not the intention of the report, and it

would certainly not be the Government's view, that one should neglect any area. I think that one may put it in this way. The report pictures a gradation from what it calls an area of concentration where there would be comprehensive missions, then places which would be outside areas of concentration but would still require comprehensive missions, then places which would require what are called selective missions but with some reinforcement, and then places which would have the minimum selective mission.
One's decision as to which kind of mission is required in any particular country cannot be rigid for all time; it must change as the pattern of world trade and power changes. But the decision one makes at any time ought to be related to the relevance of any particular post to British interests, and although among British interests one must put our commercial interests very high, this is not exclusive of the other matters mentioned by my hon. Friend.

Viscount Lambton: Does the right hon. Gentleman agree that the diplomatic downgrading of any country will cause offence and be likely to discourage increase of trade?

Mr. Stewart: I do not think so. I do not see why it should cause any offence if this or any country said that it proposed to arrange its diplomatic representation in a manner which gave the best deployment of the total number of people employed in proportion to the work which they had to do.

Sir G. de Freitas: If the principle of concentration on Europe and North America is accepted, will my right hon. Friend see that potential recruits to the Service at present in the universities realise that they will spend part of their career in the interesting and stimulating outer world and not merely in Washington, Brussels and London?

Mr. Stewart: I should always assume that anyone taking up a career in the Diplomatic Service would expect to serve in many different parts of the world, partly in what are called the areas of concentration and partly in those which lie outside.

Sir K. Joseph: Is it not odd that there is no representative of the Board of Trade


here this afternoon? The President of the Board of Trade rejected only a month ago any idea of the reorganisation, which many people have suggested is necessary, of the export promotion services of the Government and industry. Does that rejection still stand in the light of the Duncan Report?

Mr. Stewart: In the light of the Duncan Report, there will obviously have to be consultations between my right hon. Friend the President of the Board of Trade and myself.

Several Hon. Members: rose—

Mr. Speaker: Order. I must protect the business of the House.

"SUN" NEWSPAPER

Mr. Murray: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the announcement by the International Printing Corporation of the proposed closure on 1st January. 1970, of the Sun newspaper".
[Laughter.] I am sorry that any right hon. or hon. Members should laugh at the prospect of our losing another national newspaper, whatever their political views. Perhaps I ought to declare my interest as a member of the Society of Graphical and Allied Trades, the largest printing union. In case any other hon. Members laugh, I add that I am not a sponsored union member.
During the last few years, we have seen the disappearance of a large number of national—

Mr. Speaker: Order. We are not debating the subject which we shall debate if the hon. Gentleman is given leave under Standing Order No. 9. He must address himself to the reasons for his request under the Standing Order.

Mr. Murray: They are based, Mr. Speaker, on the immediate prospect that, w thin 100 days, which makes the matter urgent, we are to lose a national newspaper with a circulation of 1 million and employing about 2,000 people of many

unions, including my own, the National Union of Journalists, and at least six or seven of the other national unions covering the printing industry. Again, to bring in a point showing urgency, the proposed closure of the Sun means that before long, if the House of Commons does not take some responsibility in the matter, our national newspapers will be governed by only two large newspaper empires, depriving the people of the diversity which they have come to expect from their national Press.
The Royal Commission on the Press and the Economist Intelligence Unit pointed out the dangers inherent in a very small Press. On those grounds, I urge acceptance of my request for an Adjournment debate under Standing Order No. 9.

Mr. Speaker: I learned at Question Time that the hon. Gentleman the Member for Gravesend (Mr. Murray) proposed to ask for an Adjournment debate under Standing Order No. 9. The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the announcement by the International Printing Corporation of the proposed closure on 1st January, 1970, of the Sun newspaper".
As the House knows, under the revised Standing Order Mr. Speaker is directed to take into account the several factors set out in the Order, but to give no reason for his decision.
I have given careful consideration to the representation which the hon. Gentleman has made, but I have to rule that his submission does not fall within the provisions of the revised Standing Order, and I cannot, therefore, submit his application to the House.

SCOTTISH AFFAIRS

Ordered, That the matter of Arts and Amenities in Scotland, being a matter relating exclusively to Scotland, be referred to the Scottish Grand Committee for their consideration.—[Mr. Peart.]

NATIONAL INSURANCE ACT 1965 (AMENDMENT)

3.50 p.m.

Mr. Gwilym Roberts (Bedfordshire, South): I beg to move,
That leave be given to bring in a Bill to amend the National Insurance Act, 1965, by reducing the pensionable age for men to sixty.
My proposed Bill has one simple provision, to reduce the pensionable age of men to 60 and thus remove an anomaly which has been with us for about 30 years. Right hon. and hon. Gentlemen on both sides would wish to make the pension ages of men and women the same, although perhaps not all would agree with the age I have chosen. Some might feel that a common pensionable age of 65, or even 70, would be more appropriate. But I believe that the majority of hon. Members feel that the anomaly which has been with us since 1940 should be removed.
It is unfortunate that I am seeking to introduce a Bill of this kind at this late period of the year. The reason is that, like many other hon. Members, I had believed that when we saw the Government's White Paper we would find that in looking ahead to the later years of this century the Government were thinking in terms of equalising the pension ages. I was horrified to find that we are still sticking to the same pattern of 60 for women and 65 for men.
The argument in the Appendix to the White Paper, at page 54, is that most men reaching the age of 65 are married, and that, on average, their wives are about three years younger than they are. But that argument in favour of keeping the present discrepancy between men and women is actuarial nonsense. It may be true that at present there is a three-year gap on average between a man retiring at 65 and his wife. But in married couples below the age of 30 the gap has almost disappeared, and it is becoming narrower as the years go by.
There are many countries where the age of retirement for both men and women is already much lower than it is here. I shall not bore the House by listing them all, but in France, Italy, the Soviet Union, Hungary and many other countries, for example, the pension age is 60, and in Yugoslavia it is 55.
We should make the change I propose because there is no actuarial, commonsense reason for the present gap. Even if both men and women retired at 65, women could expect on average to enjoy a retirement pension for four years longer than men. The tragic situation at present is that when a woman retires at 60 she can expect to live for 19½ years, whereas a man who reaches 65 and retires can expect to live for only about 12 years. This means that a man can expect to draw only £3,200 in pension during his retirement, whereas a woman can expect to receive £5,100. Therefore, the present situation makes no sense from the point of view of sexual equality.
I now turn to some of the other arguments for such a change. As I have said, some hon. Members might agree that there is a case for equality, but feel that the equality should be at a higher pension age. Some might feel that 70 or 65 would be a more appropriate common age. Although the short-term tendency is for people to work longer, I believe that in view of the nature of technological change it is wrong for us to plan for a society where people tend to work longer weeks or to have longer working lives. My party was put in power to make people's working conditions better and make life easier, and we have done so to some extent. We should accept the technological argument and look forward to a lower pensionable age for men.
There is no suggestion here that men must retire at 60; the suggestion is merely that they could do so on a pension at that age if they wished. Some of my right hon. and hon. Friends are very young at 80, whereas some of us are old at 40.
Associated with the Bill is a great humanitarian argument for allowing earlier retirement. There are many occupations in which people are forced to retire in their sixties because of the pressures of very hard work. The statistics of retirement in the 1961 census showed that of 128,000 men who had already retired only 41,000 were under 60. The suggestion is that the great majority of men were retiring in their sixties, owing to ill-health, even if they did not then qualify for a pension.
I have had hundreds of letters from men all over the country who feel that


they can no longer continue to work after 60. I have received about 2,000 letters on the Bill, not only from men in that age group but from many trade unions and from young people. Some of us who are cynical about young people should reflect on the number of them who have written to me expressing concern that men should have to wait until 65 to retire.
The only argument against the Bill is that of cost. My right hon. Friend the Secretary of State for Social Services has estimated that it would cost £450 million if the present pattern of retirement were maintained. But that does not allow for reductions in medical costs or for a possible change in the retirement pattern. It is all a question of priorities. The present Government have already—

Mr. Speaker: Order. May I remind the hon. Gentleman that he is introducing the Bill under the Ten Minute Rule.

Mr. Roberts: As many of my hon. Friends would agree, the Government have already taken steps to allocate more resources for social security, but here is another direction in which they should move in the not too distant future.
It may be that my right hon. Friend does not feel that he has the money or resources to accept this proposition this year or next, but I appeal to him to ensure, in a White Paper or in any proposals looking towards the end of the century, that this anomaly, this gross discrimination between the sexes should not remain with us.

Question put and agreed to.

Bill ordered to be brought in by Mr. Gwilym Roberts, Mrs. Joyce Butler, Dr. Shirley Summerskill, Mr. Frank Allaun, Mr. Norman Atkinson, Mr. Albert Booth, Mr. Alec Jones, Mr. Brian Parkyn, Mr. Stanley Orme, and Mrs. Renée Short.

NATIONAL INSURANCE ACT 1965 (AMENDMENT)

Bill to amend the National Insurance Act, 1965, by reducing the pensionable age for men to sixty, presented accordingly, and read the First time; to be read a Second time Tomorrow and to be printed. [Bill 196.]

Orders of the Day — FINANCE BILL

As amended (in the Committee and in the Standing Committee), further considered.

Mr. Speaker: There are one or two slight modifications in the selection list I have had published today. I take this opportunity of commending not so much those who help me in the formidable task of selecting Amendments for the Finance Bill, as those who type and duplicate the lists in order to serve the convenience of right hon. and hon. Members. It is not an easy task, to be done in a hurry. It was a little late yesterday for obvious reasons. I think that the list has been got out all right today.
I do not know whether I need call attention to the changes, but on page 6826, Amendment No. 89, standing in the name of the hon. Member for Birmingham, Northfield (Mr. Chapman), in page 73, line 30, at end insert:
Importation of aromatic bitters shall be exempt from spirit duties. For the purposes of this Schedule, 'aromatic bitters' means bitters, aromatic, containing 44 to 49 per cent. alcohol, and 1·5 to 6 per cent. by weight of gentian, spices and other ingredients, 4 to 10 per cent. by weight of sugar, and packed in containers of capacity less or equal to 0·5 litres.
is selected, while Amendment No. 300, standing in the name of the hon. Member for South Angus (Mr. BruceGardyne), in page 77, line 40, at end insert:
(cc) after the word 'asbestos' in subparagraph (i) shall be inserted the words 'or polyolefin'; and after the word 'fabrics' shall be inserted the words 'and fabrics which consist wholly of blends or mixtures of jute, felt, glass fibre, asbestos or polyolefin'.
is not selected.
On page 6837, Amendment No. 312, standing in the name of the right hon. Member for Thirsk and Malton (Mr. Turton), in page 15, line 7, leave out '£425 and £680' and insert '£440 and £700', is not selected.
On page 6843, Amendment No. 238, standing in the name of the hon. Member for Windsor (Sir C. Mott-Radclyffe), in page 21, line 43, at end insert:
'or
(d) in carrying out any works for which a grant has been, or will be, given on the advice of the appropriate Historic Buildings Council'.
is selected.
On page 6856, Amendment No. 311, standing in the name of the right hon. Member for Enfield, West (Mr. Iain Macleod), in page 126, line 9, at end insert:
12. Paragraph 1 of Schedule 61 to the Finance Act, 1965, shall be amended by inserting at the end of sub-paragraph (1)(d)(iv) the following proviso:—
'Provided that for the purpose of this sub-paragraph (iv) a company resident in the United Kingdom, the whole of whose share capital is owned by another company resident in the United Kingdom, shall not be regarded as a subsidiary'.
is not selected. These are the only new features of today's list.

New Clause 13

SEVERELY DISABLED PERSONS

The Minister of Transport may by regulations made by Statutory Instrument provide that, in such cases and subject to such conditions as may be prescribed by the regulations, a mechanically-propelled vehicle shall not be chargeable with any duty under the Vehicles (Excise) Act, 1949, by reason of any use made of it for the purpose of conveying a severely disabled person, where the vehicle in question has been specifically and extensively adapted for conveying such a person and where the nature of that person's disability is such as to preclude him from making use of an invalid carriage to which otherwise he would be entitled.—[Mr. Maurice Macmillan.]

Brought up, and read the First time.

4.2 p.m.

Mr. Maurice Macmillan: I beg to move, That the Clause be read a Second time.
I understand that we are considering, at the same time, new Clause 22—Vehicles belonging to disabled persons—standing in the name of my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight):
A person who is so disabled that his vehicle must be fitted with hand controls shall qualify for exemption under section 11 of the Finance Act, 1964;
and new Clause 32—Extension of tax relief for the blind to other seriously disabled persons—standing in the name of my hon. Friend the Member for Liverpool, Garston (Mr. Fortescue):
Section 9 of the Finance Act, 1962, as amended by section 10 of the Finance Act, 1965 (Relief for blind persons) shall also apply to any other substantially disabled person, which means a person who is deaf, dumb or

otherwise substantially handicapped by loss of physical or mental faculty provided that person requires constant attendance by reason of the loss of physical or mental faculty.
I hope that the House will acquit me of discourtesy if I leave after a short while to attend another committee meeting which our late start has caused to clash with discussion of new Clause 13. The objective of the Clause is to grant road tax exemption to certain rather limited classes of severely disabled persons and to lessen the burden on such persons, many of whom are now totally immobile because of the difficulties with which they are especially faced.
The people to whom this applies are those whose mobility is dependent on travelling as passengers in private transport. We are, therefore, concerned here with a relatively small number of people and the cost is likely to be very small. The wording of the new Clause would strictly limit the number of persons to whom it could be applied for two reasons. The first is for ease of administration and definition and the second is to make it clear that there can be no increase to potential costs through abuse, through creating precedents, or through any form of escalation.
The limitation is twofold. We ask this concession only for people who fulfil two conditions. The first is that they are so severely disabled as to be unable to use an invalid carriage to which they would otherwise be entitled. This means that, by definition, they cannot use public transport. The second condition is that the vehicle for which we are seeking road tax exemption, in which they are to travel as passengers, shall be so adapted for disabled persons as to be completely identifiable. This means that it has to have a hoist for a wheelchair or other form of extensive alteration which is already a criterion.
We seek this exemption because, among all those who have the misfortune to be physically or mentally disabled, these are people for whom nothing has as yet been done to help or encourage or enable them to leave their own homes. They are not a large group. It is estimated that between 1,000 and 1,250 would be directly affected by the Clause. The estimated cost is between £25,000 and £30,000 in a year. But the concession would give a great deal of benefit and


remove a serious anomaly, because these people cannot use any form of public transport, such as a ship, train or aircraft, without first having to use private transport to get there from their homes, and they are by definition unable to use an invalid carriage. They are equally obviously unable to use a bus, tube or any other kind of local public transport. They are, therefore, dependent entirely on their own resources as passengers.
Secondly, they are the only people among the disabled who get no help for any form of outdoor mobility—the others getting help with the servicing of invalid cars, and so on. The new Clause would only partly reduce the anomaly—an anomaly whereby the State gives help to the disabled man to get himself out of doors if he can drive an invalid carriage himself, but not to those more severely disabled who cannot drive themselves.
This is a ludicrous anomaly in some ways and one which could be eliminated without very much increase in cost to the State. The costs to the individual are now very high. With purchase tax at over 36 per cent. on vehicles, 4s. 6d. tax on petrol and the road fund tax at £25 it is possible for a disabled person in this sort of category to be paying in tax now between £100 and £110 a year to remain mobile. We are asking that part of the costs—the vehicle licence duty—should be removed from them.
What about the cost of such concessions? The Joint Committee on the Mobility of the Disabled has made an elaborate calculation indicating that the persons who would be affected by the limited concessions sought in new Clause 13 would number between 1,000 and 1,250. I will not weary the Committee with all the details of these calculations, which seem to have been done with scrupulosity and conservatism as to the numbers. It is true that, if the provisions of the other Clauses we are debating with new Clause 13 were accepted and a more generous definition agreed to, the numbers might rise to between 1,750 people and 2,500. But even this will not be crippling.
The actual cost, on the same figures as those of the Joint Committee on Mobility for the Disabled, is not more than in new Clause No. 13 alone, between £25,000 and £30,000 a year, which, if the pro-

visions were extended in the more generous way presupposed in other new Clauses, might rise to between £60,000 and £65,000. The cost is somewhere between £25,000 for what we seek in new Clause No. 13, to a possible £65,000 if it were extended more widely, and this is not a very large concession.
The disabled passengers for whom we are seeking this exemption are not difficult to identify. The same procedure could be applied as is applied to invalid tricycles. The disabled passengers could satisfy the conditions which they now have to satisfy, and administratively it is not difficult to identify the individuals concerned.
If the concession is, as we suggest, limited to specially and conspicuously adapted vehicles, those, for example, fitted with car top hoists or van conversions enabling a disabled person to enter the vehicle while still in a wheelchair, there is no chance of abuse, as the vehicle is easily recognised. It is even easier than most such concessions to police, since only two or three firms in the country are capable of undertaking such conversions. So there are no difficulties either in identifying those who are entitled to the concession or in policing the vehicles.
Purchase tax exemption on van conversions is already granted if the vehicle has been adapted to such an extent that it can in effect be regarded as an ambulance. No abuse has arisen of this concession and I do not think that there would be any abuse of the concession which we are seeking.
The Chancellor, in. Government Amendment No. 25, is seeking to exempt from vehicle duty cars which are bought by non-residents and which can be used for up to 12 months before being exported. If the Chancellor is saying that those who are exporting cars and who are using them in the period between buying them and sending them overseas can be excused vehicle licence duty, how much stronger is the case of this small number of disabled people to whom a car is not a luxury but the only method by which they can ever see beyond the four walls of their room and the confines of their house and garden.
Those people, of all people, are in a difficult situation. They cannot go out alone. The mere fact that they require


constant attendance could be another way of policing this. It could be a condition of road tax exemption that the vehicle is insured for one driver only and that driver a full-time attendant of the disabled person.
I see no reason why the Government should not accept the Amendment. I hope that the Financial Secretary will tell us that this is what he intends to do. He will be creating no precedent, and he will be helping a small number of people who are badly in need of help. He will be acting in a merciful, compassionate way at no cost to himself, the Government or the future. If he shows himself markedly reluctant, I shall ask the House to take this matter to a vote.

Mr. Speaker: I would remind the House that we have a massive amount of work ahead of us, many debates, and reasonably brief speeches will help.

4.15 p.m.

Mr. Arthur Lewis: I wish to support the new Clause. I agree with the hon. Member for Farnham (Mr. Maurice Macmillan) that there is no reason why the Chancellor of the Exchequer should refuse to accept it. The cost is negligible and could easily be recouped if action were taken to see that those who should pay road tax do so.
It is high time that assistance was given to disabled persons. I am amazed at how the authorities work. A man earning thousands of pounds a year who ignores the law and never pays his tax or his insurance gets away with it. The wide boys and the wise boys have now been told. "Don't trouble to pay; no one will do anything about it." It may take more than 18 months to bring an offender to court, he has to pay a nominal fine of less than the amount he has saved by dodging, and after being fined two or three times he will refuse to pay and the authorities are hack where they started.
If the Financial Secretary cannot see his way to give this concession, my advice to the war disabled and other disabled persons is to refuse to pay. They should follow the hundreds of thousands of ordinary motorists who are not paying. Eventually, after 18 months, they may be summonsed and have to pay a nominal fine of £10. If they refuse to pay that,

after two or three attempts the courts and the police will just give up.
I do not think that that is the best way of doing it. The best way is to do it honourably and straightforwardly. Disabled people have what is called a yellow disabled certificate which is attached to the vehicle. Many are war disabled ex-Service men and women and they can get from the Ministry of Social Security a disc showing that the vehicle belongs to a war disabled person. There would, therefore, be no difficulty in applying this concession.
The cost would be infinitesimal. The Treasury would lose nothing in revenue and I hope, therefore, that the Financial Secretary will accept the new Clause. If he does not do so, I may consider voting with the Opposition.

Mr. Tim Fortescue: I rise to support the new Clause so eloquently moved by my hon. Friend the Member for Farnham (Mr. Maurice Macmillan) and to speak to new Clause No. 32, which provides for the extension of tax relief for the blind to other seriously disabled persons.
There is a considerable history to this. The Radcliffe Commission, 15 years ago, in 1954, recommended that a tax concession for blind and disabled persons should be introduced. This was proposed in this House in 1956, 1958, 1959, 1960 and 1961. Finally, in 1962, although the then Chief Secretary to the Treasury, now Lork Brooke of Cumnor, adamantly refused in Committee to concede anything to those on both sides who were advocating this concession, unfortunately for him but fortunately for the blind, my hon. Friend the Member for Plymouth, Devonport (Dame Joan Vickers) worked her feminine wiles on him during the brief period between Committee and Report and, on Report, he announced to the House, amid loud cheers, that, after all, he was willing to give this concession. He had given innumerable reasons during Report stage why it would be impossible to do it, but as a result of one visit from one determined hon. feminine Member he was able to change his mind.
The concession referred only to the blind. It was a figure of £100 a year which had been recommended in 1954 by the Radcliffe Commission and was


not introduced until 1962, by which time the £100 undoubtedly was worth less. The figure is still £100 in 1969; it has not been changed. The recommendation of the Commission has obviously been devalued. That concession to the blind appears in Section 9 of the Finance Act, 1962, and it has been slightly amended, though not significantly, by Section 10 of the Finance Act 1965.
In the debate in 1962 in which the Chief Secretary to the Treasury announced this concession, he said:
As I said in Committee and as my right hon and learned Friend"—
that was the right hon. Member for Wirrall (Mr. Selwyn Lloyd) who was then Chancellor—
would confirm, it is and continues to be his view that the right way to deal with this problem, this tragedy of disability, is not by tax relief but by direct social benefits. We have an extensive system of those benefits in this country now."—[OFFICIAL REPORT, 2nd July, 1962, Vol. 662, c. 228.]
But in the Third Reading Debate the right hon. Member for Sowerby (Mr. Houghton), who was then, of course, in opposition, said:
I do not share the view that has been so frequently expressed by Ministers on this matter, that the proper way to deal with grave affliction is through the social services and not through tax reliefs.… I hope that in due course the Government—any Government—wilt accept the broad principle put forward by the Royal Commission that grave affliction can so alter the pattern of a person's life that it is proper that tax relief should be given to meet exceptional conditions."—[OFFICIAL REPORT, 6th July, 1962, Vol. 662, c. 886.]
Since that time the right hon. Member for Sowerby has had an opportunity to put into effect, or to persuade the Cabinet to put into effect, the principles he announced in the debate. But we are still without any tax relief for any category of disabled except the blind.
Every year since 1962, from the back benches on both sides of the House, the effort has been made to extend the principle of tax relief for the blind to other severely disabled people, but completely without success. I myself have tried on two occasions and many others better qualified than I.
Now at last, and all credit to the Government, we have a slight change in the situation. In the White Paper Command 3883, "National Superannuation and Social Insurance", issued by the Secre-

tary of State for Social Services in January this year, the Government said that they recognised the needs of the chronic sick and disabled and intended in the new Social Security Bill, which they are to introduce with effect from April 1972, to introduce a constant attendance allowance for those in need of it. Both sides of the House will welcome this proposal, although possibly will not agree with many of the other proposals in the White Paper.
The last sentence in paragraph 91 says
The Government Social Survey as at present conducting a nationwide survey of the chronic sick and disabled…This is designed, among other things, to establish the facts which are needed before decisions are taken on the precise details of the new allowance.
Succeeding Chancellors, Chief Secretaries and Financial Secretaries of the Treasury have said that this tax allowance for the blind cannot be extended to other categories of disabled people because of the difficulty of assessing the disability and also the difficulty of identifying the people. Now that the survey is being undertaken this difficulty will to a large extent disappear.
In Committee upstairs on 3rd July, the Minister of State, Department of Health and Social Security, was being pressed to introduce a constant attendance allowance earlier than April, 1972, since the April, 1972, date for the rest of the White Paper is conditional on the demands of P.A.Y.E. whereas their allowance need not be paid through P.A.Y.E. at all. He resisted that demand and the Amendments moved by the Opposition were voted down. But he then said of the new scheme:
We shall have it before us in legislative form in the autumn…There will be a further statement before we come to the autumn which will give a little more information about our intentions not only for an attendance allowance, but for long-term sickness benefits."—[OFFICIAL REPORT, Standing Committee E, 3rd July, 1969; c. 113.]
We have not yet had that Statement. We have not long to go now before we go away for the Summer Recess and I wonder whether the Financial Secretary today could say when that statement will be made. The system of drawing up a register of severely disabled must be far advanced.
What I am proposing in the new Clause is that tax relief for severely disabled should be introduced on the lines of tax


relief to the blind in this financial year. This would mean that the assessment of that tax relief would not be undertaken until after 5th April next year. The income on which the tax relief would be granted would be obtained in this financial year, but under our tax system it would not be assessed until after 5th April, 1970. By that time the survey will have been completed and a register of disabled will either have been completed, or will be well under way. There should be no reason at all why this Clause should not be approved by the Government since by that time the condition making possible such tax relief for the disabled will exist, as the register will exist. There should be no difficulty in the Financial Secretary's conceding this new Clause to us. It is backed, I am sure. by hon. Members on both sides of the House. He will readily agree that it is a necessary and logical extension of what we already do for the blind. I very much hope that he will be able to agree to it. We all know the effect of constant dripping on a stone. I very much hope that it will have the same effect on a "Diamond".

Mr. Hugh Fraser: I am sure that the whole House hopes that the Government will be able to accept this group of Clauses. There are two further Clauses which relate to the spastics.
The House will be aware that recently the Spastics Society suffered a grievous loss in taxation relief amounting to a large sum of money. Many right hon. and hon. Members of the House who are associated with this and other movements realise the growing need of these people, who cannot be looked after in the normal way by the State, who fall outside the National Health Service and who are in the greatest possible need of assistance both in the way of tax rebate and of assistance from their friends and various societies who look after them.
The concessions have been adumbrated by my hon. Friends on the Conservative Front Bench on the new Clause in regard to the blind, in which category people involved can easily be identified. The sums involved in this matter are trivial in a country as large and as rich as ours. Surely the right hon. Gentleman the Financial Secretary, whose return to the

Front Bench we all welcome, will be able to make this concession.
The amount of pleasure and real joy these concessions would give to some needy people is quite incommensurate with the small sum of money involved. I hope that the Government will be able to accept the new Clauses.

4.30 p.m.

Mrs. Jill Knight: I rise to move new Clause 22, and—

Mr. Speaker: Order. The hon. Lady cannot move the Clause, but she can discuss it.

Mrs. Knight: Then perhaps I might do that and, at the same time, associate myself with all that has been said in this debate.
The case which prompted me to table the Clause arises from an incident concerning a constituent of mine. He went off to war as a young, healthy able-bodied man. Fighting in the Western Desert, he lost both legs. He returned to Birmingham and learnt to walk on artificial legs. Today, he manages them very well. However, because he has artificial legs he is not allowed to drive a car unless it is fitted with hand controls. He does not ask for any help towards the provision of the vehicle. He is perfectly happy to provide his own, but he feels rather sore when the time comes to change his car, because the cost of conversion to hand controls must be borne by him, and the cost is about £25.
My Clause is the latest instalment in a long running fight over this case. I am sure that hon. Members on both sides recognise that my constituent has reason to feel aggrieved at getting no help of this kind because of his injury.
Recently, he applied for exemption from payment of the excise duty. He received a letter dated 17th February, 1969, from the Department of Health and Social Security, in which it was explained to him that
For a disabled person to qualify for exemption under Section 2 of the Finance Act, 1964, two conditions have to be fulfilled; namely, that the applicant not only qualifies in one of the groups of disabled eligible for one of our vehicles, but also that his vehicle has had special controls fitted because he is unable to drive with standard controls.


The letter went on to tell him:
The report of your recent medical examination indicates that you are able to walk moderate distances and that you do not qualify in any of these categories.
However many yards or even miles my constituent is able to walk, the Ministry of Transport says that it will not permit him to drive a car unless his vehicle is fitted with a hand accelerator and non-slip foot pedals. In other words, the Ministry of Transport will not accept that my constituent is safe to drive because of his two artificial legs unless he has proper controls. The Ministry of Health and Social Security, on the other hand, rules that because he is able to walk a little way, he does not qualify. He appears to fall between two stools.
My right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser), a moment or two ago, referred to the disabled being able to enjoy their motoring. My constituent's case is a matter of justice, not of enjoyment. He lost his legs in the war, and he asks for very little help. But, as a matter of principle, it seems to me that if the Ministry of Transport says that his car must be fitted with hand controls before he can drive it, that should be the criterion upon which to judge his case.
I hope that my Clause will receive sympathetic consideration from the Financial Secretary. I have tried to be brief in my remarks about the case, but it is a strong one and I hope that it will be accepted.

Mr. Evelyn King: The case referred to by my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) points to what anyone who has familiarised himself with these matters knows full well. The degree of variation in the reliefs for the disabled bristles with anomalies. I do not suggest that it is the fault of any of the present occupants of the Treasury Bench, since the situation has been with us for years. However, we are due for a massive overhaul of the whole system.
I want to touch briefly on the points which were moderately and at times movingly put by my hon. Friend the Member for Farnham (Mr. Maurice Macmillan). Within the context of transport, there is the peculiar fact that the less the degree of disablement, the less the benefit. If a disabled man merely has lost the use of his legs, the State pro-

vides him with a motor vehicle and treats him generously. If a disabled person is unfortunate enough to lose the use of his legs and his arms, the State does nothing. That is an anomaly which demands urgent attention.
It was my right hon. Friend the Member for Barnet (Mr. Maudling) who, some years ago, first exempted from taxation motor vehicles used by the disabled. In that connection, it might be relevant to relate the figures quoted by my hon. Friend the Member for Farnham to the total. There are about 27,000 disabled persons who are assisted by the State in relation to their vehicles and at a cost of about £.2¾ million. I am sure that the Financial Secretary will correct me if I am wrong, but that was the figure about a year ago. A person who is disabled to the point at which he can drive gets, on average, a cash benefit of £130 a year. That is a fairly substantial benefit. The unfortunate person who is so disabled that he cannot drive gets nothing. That is an anomaly which should be dealt with urgently.
I have a vivid memory of a constituent of mine who wrote to me a few months ago asking me to go to see him as he could not come to see me. He did not say what his trouble was. It is not always easy to comply with such a request in a rural constituency, but I managed to get to see hire one evening. He was a fit man aged about 50. He asked me in, and told me that he wanted me to meet his wife. He brought into the room in his arms a woman who was china-white, like a doll.
My constituent was unable to perform any normal human function. He put her gently into a chair. Then he asked me a simple question, "If a fit unemployed man of 25 is out of work for a few weeks, he receives as of right a fairly generous allowance from the State. Why is it that woman like this who is totally disabled receives nothing as of right?"
No doubt this Clause cannot deal adequately with that sort of case, but I think that it is reasonable to ask the Financial Secretary to consider the figures which I have given him. The Government spend £2¾ million on the less disabled. All that we ask is that about £65,000 should be added to it to help in some small measure those who have far greater disabilities. Anyone who has seen such cases cannot help feeling


sympathetic. I hope that the right hon. Gentleman will be able to express that sympathy in practical terms.

Mr. John Astor: I should like briefly, but most sincerely, to support my hon. Friends on these three new Clauses. I realise that there are many wider reaching problems of disablement about which the Government are concerned and I hope that they will bring forward some solutions, but I hope that this will not stop them accepting the new Clauses, which are deliberately restricted in the scope of the number of people whom they will benefit. They are aimed to bring a little happiness and make life easier for the most severely disabled.
On new Clause 13, as my hon. Friend the Member for Farnham (Mr. Maurice Macmillan) pointed out, the people who would benefit will never be able to drive cars. Nor will they ever be able to use public transport or an ordinary private car. They can only be hoisted into a specially adapted vehicle.
I had a recent case in my constituency about which I have corresponded with the Financial Secretary. It concerns a young man who was involved in a severe road accident as a result of which he was completely paralysed in both legs and he has no movement left in his hands. He had formerly belonged to a local motor car club and his colleagues rallied round to meet the cost of adapting a special vehicle for him. They were very dismayed when they found that they would be liable to pay the vehicle excise duty.
The Financial Secretary, with his usual courtesy, wrote to me expressing the Government's anxiety and sympathy to do all that they could to help disabled people to live as near normal lives as possible, but pointing out the difficulties, the main one being that they were frightened that any concession, however limited, might lead to greater pressure of demand for an extension of this type of concession. However, he ended his letter on a more hopeful note:
Despite these difficulties, you may, however, assure your constituents that the type of case about which he writes is known to us and will continue to be kept under review.
I hope that the Financial Secretary will take the opportunity afforded by the introduction of this Clause to review his earlier decision and that we shall get a

sympathetic answer at the conclusion of the debate.
I turn now to new Clause 32, which concerns extension of tax relief for the blind to other categories of disablement. We all recognise the tragedy and consequences of blindness, but there are other forms of disablement which have at least as great an element of tragedy and often an even greater element of physical handicap and restriction which make it more difficult for some of these unfortunate people to find useful employment.
Certainly, some of these severely disabled people, if they are able to live at home, are involved in additional expenditure at least as great as that which could be involved in blindness. For instance, the expenses of people who depend on an artificial lung with mechanical breathing apparatus, and those who must have an attendant to look after their every need—special diets, extra warmth, and so on—all add up and it seems reasonable that we should do all that we can to help them, especially so that they can continue to live in their own homes.
Often one tragedy is that the family can struggle to keep a disabled person living in the home in family surroundings, but, due to the financial strain, they are not able to carry on. In that event the disabled person goes into a hospital and occupies a hospital bed which is not necessary from a medical point of view. That is a great cost to the nation and to the Health Service.
It may be argued that this Clause would only be of benefit to people who have a taxable income on which to receive relief. This may be true, but surely, in these cases, all that the Government would be doing would be allowing these people to retain a little more of their own money with which to meet the expenses forced upon them by no wish of their own. It seems perfectly reasonable that this Clause should be accepted.
I should like to see the benefit extended to other people who would not benefit by the Clause, but this would at least be a first step. I hope that the Government will take it.

Sir Douglas Glover: I always think, after many years in this House, that one of the most moving periods is when we are dealing with the


Finance Bill and back benchers bring forward new Clauses and Amendments dealing with disabled people. The House at that time is always at its best and the Front Bench, through no fault of its own, is always at its worst. In reverse, it is rather like the boy in Holland who had his finger in the dyke. The Government are terrified of taking their finger out because they think that, as a result, there will be an absolute flood. In a society like ours, the fears of Ministers about opening up the floodgates to deal with some of these tragic cases which are raised every year are excessive.
4.45 p.m.
My hon. Friend the Member for Newbury (Mr. Astor) spoke movingly on new Clause 32. He said that when the presure on a disabled person's family becomes such that eventually that disabled person has to be hospitalised, the cost to the State is probably far greater than the cost of providing additional tax relief or additional facilities, such as a motor vehicle, which would take the burden off that disabled person's family and enable them to continue to give him the love and personal attention in their home that cannot be obtained to the same extent elsewhere. The net cost to the State would probably be less than it is now because the Government take this difficult and hard line. They are frightened of opening the floodgates by accepting new Clauses on the Finance Bill each year dealing with the severely disabled.
I think that the whole House must be moved and seized of the absurdity of the situation which is drawn to our attention in new Clause 13. It appears that the State is generous to a person who is half disabled but absolutely flint-hearted if someone is completely disabled. Yet, a completely disabled person puts a far greater burden and strain on the emotions of a family unit. Therefore, the severely disabled should receive the maximum help. I hope that the Financial Secretary will find it possible to accept new Clause 13, because the cost can only be comparatively small.
I now turn to new Clause 32, which seeks to give tax relief to seriously disabled people, apart from the blind. I should like to call the attention of the House to the difference in the attitude of the public to different kinds of disablement. The blind receive a good deal of

help from the public because it is easy to see that a person is blind. However, people who are stone deaf or dumb may suffer just as great a disability in the carrying on of their normal lives. However because their disabilities are not apparent to the public as they walk through the streets, appeals for funds for people suffering from those disabilities never receive that same response as appeals for the blind or the physically disabled—people with no legs, and so on. The deaf and dumb are not likely to get the same amount of charitable help which is given to the spastics and other people whose disabilities can be seen by the public.
Therefore tax relief, allowances and help is even more important for those cases than for those whose disabilities can be seen at a glance by the general public, whose emotions and sympathies are automatically aroused because they can see the problems confronting such people. I hope, therefore, that the Financial Secretary will accept new Clause 32. If it applies to the blind, I suggest that it should apply to people whose disabilities can be very much worse.
I suppose that all of us from time to time have thought of what would happen if we were disabled. Our first reaction is to be terrified of going blind. But, having met a good number of blind and other disabled people, I am not at all certain whether I would not sooner be blind than deaf or dumb. At least, a blind person can communicate and can hear music. He is not nearly as deprived of contact with the rest of the world. Therefore, these people ought to be treated generously by the State as we now, as a result of the Government's concession, deal with the blind. I hope that the right hon. Gentleman will be prepared to accept both new Clauses.

Mr. Marcus Worsley: I support the new Clauses, and, in particular, new Clause 32, to which my name is added.
My hon. Friend the Member for Ormskirk (Sir D. Glover) said that the Front Bench was always at its worst on these occasions. I hope that today is an exception to that rule, because for the life of me I cannot understand the ground on which the right hon. Gentleman the Financial Secretary could oppose


these Clauses. It would be impossible for him to oppose them on the ground of logic. Once one accepts the proposition that blindness reduces the ability of a taxpayer to pay tax, there is no logical reason for saying that that principle, which I believe to be sound, should not apply to disability as a whole.
Surely there is exactly the same degree of additional cost in ordinary living, and therefore a reduced ability to pay in the one case as in the other? The Financial Secretary is an intelligent and logical man, and I therefore suggest that he is not able to say that, in logic, he can defend the proposition that the blind should get these reliefs, but other disabled people should not.
I suppose that the right hon. Gentleman will be driven to the proposition that this is administratively difficult. I have always found that a difficult argument to swallow, because just such a proposition exists in both the war pensions scheme, and in the industrial injuries scheme. I have never understood what the great difficulty is in bringing the sort of criteria used there into national insurance or taxation. The arguments about administrative inconvenience are becoming untenable, for the simple reason that some of the right hon. Gentleman's colleagues have announced that in the autumn they intend to legislate to put an equivalent right into the National Insurance scheme.
I dare say that the wording of the new Clause is not exactly right. I am sure that if there is a better wording which the Government will accept my hon. Friend will withdraw his Clause in favour of something different. As we are at the end of the summer in Parliamentary terms, it must be true to say that the legislation for the autumn is in draft, and that the machinery for doing this is in existence. I therefore suggest that the Government have, or very shortly will have, within their power the administrative machinery necessary to bring about this relief. I have a feeling that my hon. Friend may be wrong in saying that the Front Bench is at its worst on these occasions. I hope that it is at its best.

The Financial Secretary to the Treasury (Mr. Harold Lever): I do not accept that the Government, even though they are not the Government of which I am a

member, are at their worst on these occasions. The truth is that this House is, rightly, always seeking to extend the boundaries of human compassion for those who have been smitten by the tyrant stroke of fate leading to personal disability, and it is right that there should be no fixed boundaries to that compassion. It is right, too, that the House and our society should strive continually to deepen the sense of communication between those who are fit and able, and those who have been afflicted by one or other of these tragic ailments.
While hon. Members are undoubtedly entitled to seize on individual and perfectly sound points of justice and compassion, there is an obligation on the Government, whoever they may be, to try to make a coherent approach where annually we try—and this is not a party political matter—to bring a greater degree of compassion and help to those who are disabled.
The truth of the matter—and this must be faced, and I know that it will be by those who have been good enough to assume that I am logical, whatever else I might not be—is that if I accepted every proposal put to the Government there would be as many anomalies and as many illogicalities at the end of the day as there are now. I cannot pretend that the present system of piecemeal compassion as we advance is perfect, or holds together the lines of strictly well-devised priorities. It has just been what, from time to time, different Governments have felt, trying to keep some coherence, and to respond to the feelings of society to move forward on these matters. It is a sort of extemporised system.
I think that the hon. Member for Dorset, South (Mr. Evelyn King) is right in saying—if we take the first new Clause —that on the face of it it is anomalous that we help those who are able to help themselves by being able to drive, but we are not prepared to make a similar concession for those who are not able to drive at all, and who are really worse off. It is not really as illogical as that, oddly enough, if one comes to think about it. Life consists often in trying to help people who have a borderline capacity to help themselves. It is not always wrong to say that with a few £s we can provide a car—not merely


the licence duty; we provide the transport itself—for those who are able to drive themselves, whereas it is beyond our means to cope with the vast number of people who are worse off who cannot hope to drive at all.
We could not possibly provide them with help in that way, namely, with some marginal help of a vehicle, or special type of vehicle, to allow them to drive themselves. But I agree with hon. Members when they say that if we move to help those who are able to help themselves, we are obliged to try to help those who cannot benefit from the concessions that we have made so far.
On new Clause 13, it is not a question of worrying about floodgates of expenditure, or anything of that kind. I am not in the least concerned with that here. I do not think that vast expenditure is involved. It is simply an attempt to keep some coherence which makes me unwilling to accept the Clause. The truth is that it is quite indefensible. What is done here is to give to those who are rather worse disabled a fraction of the help that we now give to people who are less disabled. This will not do as a remedy, or as a purported remedy. What is worse, the Clause helps those who need a special and extensive adaptation of a vehicle only to the extent of giving them relief from licence duty.
A. man may be dreadfully disabled. I do not know what is meant by "extensive and obvious alteration of the vehicle", but great stress was laid on this. I take it that what is required is a major change in the vehicle. A man is to get help only if his disability is of a kind which requires a major operation on the vehicle. This is no measure of his disability. He may be totally blind, deaf, and dumb, and no special adaptation of the vehicle is required. It simply means that he needs a vehicle. He is just as disabled as a man who needs a platform, or a special adaptation, but under these provisions he would not benefit at all. It is anomalous to pick that one section of disabled people who would qualify for help if they were able to drive, but are not able to drive, and say that if they cannot be given the facilities to drive they shall be given freedom from licence duty as is given to other disabled people.
If we are to make progress we have to find a more coherent and adequate way of doing so. This is not a means of economising, or of avoiding responsibility. The Department of Health and Social Security—the appropriate Department—is struggling to enlarge the help that can be given to disabled people in the form of transport. I agree that whatever we do there will be faulty logic and priorities, but what we do is done in good faith. We help as fast as we can. We have to go on with the emphasis on pushing at the borders more helpfully, rather than attempting partial solutions, such as that suggested in the new Clause. For the same reason, the Clause referred to by the hon. Member for Birmingham, Edgbaston (Mrs. Knight) must be resisted.
5 p.m.
On the question of general allowances, I do not want to rehearse what was said last year because anyone who wants a full statement has only to turn to last year's HANSARD report. On 3rd July last year, the Minister of State set out copiously all the reasons for rejecting proposals for all these allowances. I will sum up in a few words what he said, and I hope that the House will not think me discourteous for not repeating what he said in detail. He said that it would benefit these people if the cost of an attendant were met, but it would do nothing for those who might incur substantial expense in other ways.
I keep having this difficult problem when people write to me telling me of persons who would qualify for allowances for an attendant to look after them, but who, unhappily, have become too ill to be able to be looked after at home and have to go into a nursing home, thereby losing the allowance because they no longer have an attendant. This is part of the general problem of trying to bring compassion and coherence into the whole move to help people in these difficulties, without yielding—as one is tempted to do—too immediately to every kindly impulse.
This is a problem that faces every Minister. We are given particulars of an individual case, and we would very much like to say, "Let it go. Let this man have this concession." But we cannot do that. We have to try to establish a coherent principle upon which to operate the concession.

Mr. Fortescue: May I remind the right hon. Gentleman of what the Secretary of


State for Social Security said in paragraph 91 of Cmnd. 3883, namely:
A new attendance allowance will therefore be introduced for very severely disabled people.

Mr. Lever: An attendance allowance is a matter for social security; it is not a tax allowance. That is exactly my point. That is the way to proceed coherently and compassionately by making an allowance positively to those who need it, as generously as the community is willing to allow.

Mr. Hugh Fraser: The right hon. Gentleman talks about compassion being piecemeal. Compassion always is. Comprehensive compassion, unless one is Almighty God, is impossible. We must have piecemeal compassion.

Mr. Lever: I accept that. I have not said otherwise.
The present system came into being piecemeal by pressing certain concessions on the Government of the day. But some semblance of coherence and logic must be maintained. I have dealt with the point that the hon. Member made on the question of a piecemeal concession. I agree. We cannot have a perfect recreation of the whole system of benevolence. We must add to it piecemeal, but we must make the right kind of addition piecemeal, through the Ministry of Social Security. We are using the money to the best effect and in the most logical way. The Amendment would cause us to do so in a rather less logical way.
The Government are continuing to meet the need of people who are severely disabled through the social security system, on a scale probably more generous than anybody has conceived in the past. There is no point in a society's being constructive and creative if it is not to become more compassionate to its more deserving members.

Mrs. Knight: Will the right hon. Gentleman bring his influence to bear on the Minister of Transport to try to persuade

Division No. 331.]
AYES
[5.8 p.m.


Alison, Michael (Barkston Ash)
Barber, Rt. Hn. Anthony
Biggs-Davison, John


Allason, James (Hemel Hempstead)
Beamish, Col. Sir Tufton
Black, Sir Cyril


Aster, John
Bell, Ronald
Blaker, Peter


Atkins, Humphrey (M't'n &amp; M'd'n)
Bennett, Sir Frederic (Torquay)
Boardman, Tom (Leicester, S.W.)


Baker, Kenneth (Acton)
Bennett, Dr. Reginald (Gos. &amp; Fhm)
Body, Richard


Baker, W. H. K. (Banff)
Biffen, John
Bossom, Sir Clive

him, in the circumstances which I have outlined, to act in the way suggested by the right hon. Gentleman in providing that it shall not be necessary to demand hand controls in vehicles driven by these people?

Mr. Lever: It is not for me to dictate to the Minister of Transport the terms on which he should allow people to drive cars. That is an area in which the Treasury writ does not run. I see the anomoly in the case of the hon. Member's constituent who is caught between two Departmental requirements. He does not qualify for the benefit, and has inconvenience forced upon him. I will see that the point is again raised with my right hon. Friend. I cannot say at this point whether he will be able to help the hon. Lady.

Mr. Patrick Jenkin: We welcome the Financial Secretary's return to our deliberations and hope that he is restored to health. I cannot give the same welcome to his speech. My right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser) put his finger squarely on the point of Amendments of this nature when he said that progress in this and other related fields has always been achieved by slow and often unrelated stages. The Financial Secretary is chasing a chimera if he believes that he will be able to pull out of the hat—as a rabbit is pulled out of a hat—a wholly coherent system which would not require further piecemeal advances in helping the disabled.
The Amendment, moved by my hon. Friend the Member for Farnham (Mr. Maurice Macmillan) and supported by hon. Members on both sides, is a modest one. The Financial Secretary has not made what we regard as a wholly convincing case, and we therefore think that it would be right to divide in favour of the new Clause.

Question put, That the Clause be read a Second time:—

The House divided:

Boyd-Carpenter, Rt. Hn. John
Hay, John
Osborne, Sir Cyril (Louth)


Boyle, Rt. Hn. Sir Edward
Heald, Rt. Hn. Sir Lionel
Page, Graham (Crosby)


Braine, Bernard
Heath, Rt. Hn. Edward
Page, John (Harrow, W.)


Bromley-Davenport, Lt.-Col. Sir Walter
Heseltine, Michael
Pardoe, John


Brown, Sir Edward (Bath)
Higgins, Terence L.
Peel, John


Bruce-Gardyne, J.
Hiley, Joseph
Percival, Ian


Bryan, Paul
Hill, J. E. B.
Peyton, John


Buchanan-Smith, Alick (Angus, N&amp;M)
Hirst, Geoffrey
Pike, Miss Mervyn


Buck, Antony (Colchester)
Hogg, Rt. Hn. Quintin
Pink, R. Bonner


Bullus, Sir Eric
Holland, Philip
Pounder, Rafton


Burden, F. A.
Hordern, Peter
Powell, Rt. Hn. J. Enoch


Campbell, B. (Oldham, W.)
Hornby, Richard
Price, David (Eastleigh)


Campbell, Gordon (Moray &amp; Nairn)
Howell, David (Guildford)
Prior, J. M. L.


Carlisle, Mark
Hunt, John
Pym, Francis


Carr, Rt. Hn. Robert
Hutchison, Michael Clark
Quennell, Miss J. M.


Channon, H. P. G.
Iremonger, T. L.
Ramsden, Rt. Hn. James


Chataway, Christopher
Jenkin, Patrick (Woodford)
Rees-Davies, W. R.


Chichester-Clark, R.
Jopling, Michael
Ridley, Hn. Nicholas


Clark, Henry
Joseph, Rt. Hn. Sir Keith
Ridsdale, Julian


Clegg, Walter
Kaberry, Sir Donald
Rossi, Hugh (Hornsey)


Cooke, Robert
Kerby, Capt. Henry
Royle, Anthony


Costain, A. P.
Kershaw, Anthony
Russell, Sir Ronald


Craddock, Sir Beresford (Spelthorne)
King, Evelyn (Dorset, S.)
Scott-Hopkins, James


Cunningham, Sir Knox
Knight, Mrs. Jill
Sharples, Richard


Currie, G. B. H.
Lancaster, Col. C. G.
Shaw, Michael (Sc'b'gh &amp; Whitby)


Dalkeith. Earl of
Lane, David
Smith, Dudley (W'wick &amp; L'mington)


Dance, James
Lawler, Wallace
Smith, John (London &amp; W'minster)


Davidson, James(Aberdeenshire, W.)
Legge-Bourke, Sir Harry
Speed, Keith


d'Avigdor-Goldsmid, Sir Henry
Lloyd, Rt. Hn. Selwyn (Wirral)
Stainton, Keith


Digby, Simon Wing field
Longden, Gilbert
Stodart, Anthony


Dodds-Parker, Douglas
Lubbock, Eric
Stoddart-Scott, Col. Sir M.


Doughty, Charles
McAdden, Sir Stephen
Taylor, Sir Charles (Eastbourne)


Drayson, G. B.
MacArthur, Ian
Taylor, Edward M.(G'gow, Cathcart)


du Cann, Rt. Hn, Edward
Mackenzie, Alasdair (Ross&amp;Crom'ty)
Taylor, Frank (Moss Side)


Eden, Sir John
Maclean, Sir Fitzroy
Thatcher, Mrs. Margaret


Errington, Sir Eric
Macleod, Rt. Hn. Iain
Thorpe, Rt. Hn. Jeremy


Eyre, Reginald
McMaster, Stanley
Tilney, John


Fisher, Nigel
Macmillan, Maurice (Farnham)
Turton, Rt. Hn. R. H.


Fletcher-Cooke, Charles
McNair-Wilson, Michael
van Straubenzee, W. R.


Fortescue, Tim
Maddan, Martin
Vaughan-Morgan, Rt. Hn. Sir John


Foster, Sir John
Maginnis, John E.
Vickers, Dame Joan


Fraser, Rt. Hn. Hugh (St'fford &amp; Stone)
Marples, Rt. Hn. Ernest
Waddington, David


Galbraith, Hn. T. G.
Marten, Neil
Wainwright, Richard (Colne Valley)


Gilmour, Ian (Norfolk, C.)
Maude, Angus
Walker, Peter (Worcester)


Gilmour, Sir John (Fife, E.)
Mawby, Ray
Walker-Smith, Rt. Hn. Sir Derek


Glover, Sir Douglas
Maxwell-Hyslop, R. J.
Ward, Dame Irene


Glyn, Sir Richard
Mills, Peter (Torrington)
Weatherill, Bernard


Godber, Rt. Hn. J. B
Mills, Stratton (Belfast, N.)
Wells, John (Maidstone)


Goodhart, Philip
Mitchell, David (Basingstoke)
Whitelaw, Rt. Hn. William


Goodhew, Victor
Monro, Hector
Wiggin, A. W.


Grant, Anthony
Montgomery, Fergus
Williams, Donald (Dudley)


Gresham Cooke, R.
More, Jasper
Wilson, Geoffrey (Truro)


Griffiths, Eldon (Bury St. Edmunds)
Morgan, Geraint (Denbigh)
Winstanley, Dr. M. P.


Gurden, Harold
Morgan-Giles, Rear-Adm.
Wood, Rt. Hn. Richard


Hall, John (Wycombe)
Morrison, Charles (Devizes)
Woodnutt, Mark


Hall Davis, A. G. F.
Mott-Radclyffe, Sir Charles
Worsley, Marcus


Harris, Reader (Heston)
Munro-Lucas-Tooth, Sir Hugh
Wright, Esmond


Harrison, Brian (Maldon)
Nabarro, Sir Gerald
Younger, Hn. George


Harvey, Sir Arthur Vere
Neave, Airey



Harvie Anderson, Miss
Noble, Rt. Hn. Michael
TELLERS FOR THE AYES:


Hastings, Stephen
Nott, John
Mr. R. W. Elliott and Mr. Timothy Kitson.


Hawkins, Paul
Onslow, Cranley




Osborn, John (Hallam)





NOES


Abse, Leo
Blackburn, F.
Carmichael, Neil


Albu, Austen
Blenkinsop, Arthur
Carter-Jones, Lewis


Allaun, Frank (Salford, E.)
Boardman, H. (Leigh)
Castle, Rt. Hn. Barbara


Alldritt, Walter
Booth, Albert
Chapman, Donald


Anderson, Donald
Boston, Terence
Concannon, J. D.


Ashley, Jack
Bottomley, Rt. Hn. Arthur
Conlan, Bernard


Atkins, Ronald (Preston, N.)
Boyden, James
Craddock, George (Bradford, S.)


Atkinson, Norman (Tottenham)
Bradley, Tom
Crawshaw, Richard


Bacon, Rt. Hn. Alice
Bray, Dr. Jeremy
Cronin, John


Barnes, Michael
Brooks, Edwin
Crosland, Rt. Hn. Anthony


Barnett, Joel
Brown, Hugh D. (G'gow, Provan)
Crossman, Rt. Hn. Richard


Baxter, William
Brown, Bob (N'c'tle-upon-Tyne, W.)
Dalyell, Tam


Beaney, Alan
Brown, R. W. (Shoreditch &amp; F'bury)
Darling, Rt. Hn. George


Bence, Cyril
Buchan, Norman
Davidson, Arthur (Accrington)


Benn, Rt. Hn. Anthony Wedgwood
Buchanan, Richard (G'gow, Sp'burn)
Davies, Ednyfed Hudson (Conway)


Bidwell, Sydney
Butler, Herbert (Hackney, C.)
Davies, C. Elfed (Rhondda, E.)


Binns, John
Butler, Mrs. Joyce (Wood Green)
Davies, Dr. Ernest (Stretford)


Bishop, E. S.
Callaghan, Rt. Hn. James
Davies, Rt. Hn. Harold (Leeh)







Davies, Ifor (Gower)
Jay, Rt. Hn. Douglas
Pavitt, Laurence


de Freitas, Rt. Hn. Sir Geoffrey
Jenkins, Rt. Hn. Roy (Stechford)
Pearson, Arthur (Pontypridd)


Delargy, Hugh
Jenkins, Hugh (Putney)
Peart, Rt. Hn. Fred


Dell, Edmund
Johnson, Carol (Lewisham, S.)
Pentland, Norman


Dempsey, James
Johnson, James (K'ston-on-Hull, W.)
Perry, Ernest C. (Battersea, S.)


Diamond, Rt. Hn. John
Jones, Dan (Burnley)
Perry, George H. (Nottingham, S.)


Dickens, James
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Price, Christopher (Perry Barr)


Dobson, Ray
Jones, J. Idwal (Wrexham)
Price, Thomas (Westhoughton)


Doig, Peter
Jones, T. Alec (Rhondda, West)
Price, William (Rugby)


Driberg, Tom
Judd, Frank
Probert, Arthur


Dunn, James A.
Kelley, Richard
Randall, Harry


Dunnett, Jack
Kenyon, Clifford
Rankin, John


Dunwoody, Mrs. Gwyneth (Exeter)
Kerr, Dr. David (W'worth, Central)
Rees, Merlyn


Dunwoody, Dr. John (F'th &amp; C'b'e)
Kerr, Russell (Feltham)
Richard, Ivor


Eadie, Alex
Lawson, George
Roberts, Albert (Normanton)


Edelman, Maurice
Leadbitter, Ted
Roberts, Rt. Hn. Goronwy


Edwards, Robert (Bileton)
Lee, John (Reading)
Roberts, Gwilym (Bedfordshire, S.)


Ellis, John
Lever, Rt. Hn. Harold (Cheetham)
Robinson, Rt. Hn. Kenneth (St. P'c'as)


English, Michael
Lewis, Ron (Carlisle)
Rodgers, William (Stockton)


Ensor, David
Lipton, Marcus
Roebuck, Roy


Evans, Albert (Islington, S.W.)
Lomas, Kenneth
Rogers, George (Kensington, N.)


Evans, Fred (Caerphilly)
Loughlin, Charles
Ross, Rt. Hn. William


Evans, Ioan L. (Birm'h'm, Yardley)
Lyon, Alexander W. (York)
Rowlands, E.


Finch, Harold
Mabon, Dr. J. Dickson
Ryan, John


Fitch, Alan (Wigan)
McBride, Neil
Shaw, Arnold (Ilford, S.)


Fitt, Gerard (Belfast, W.)
MacColl, James
Sheldon, Robert


Fletcher, Rt. Hn. Sir Eric (Islington, E.)
McGuire, Michael
Shinwell, Rt. Hn. E.


Fletcher, Raymond (Ilkeston)
McKay, Mrs. Margaret
Short, Mrs. Renée (W'hampton, N. E.)


Fletcher, Ted (Darlington)
Mackenzie Gregor (Rutherglen)
Silkin, Rt. Hn. John (Deptford)


Foot, Rt. Hn. Sir Dingle (Ipswich)
Mackintosh, John P.
Silverman, Julius


Foot, Michael (Ebbw Vale)
Maclennan, Robert
Skeffington, Arthur


Ford, Ben
McMillan, Tom (Glasgow, C.)
Slater, Joseph


Forrester, John
McNamara, J. Kevin
Small, William


Fowler, Gerry
Mabon, Peter (Preston, S.)
Snow, Julian


Freeson, Reginald
Mahon, Simon (Bootle)
Spriggs, Leslie


Galpern, Sir Myer
Mallalieu, E. L. (Brigg)
Steele, Thomas (Dunbartonshire, W.)


Gardner, Tony
Mallalieu, J. P. W. (Huddersfield, E.)
Stonehouse, Rt. Hn. John


Garrett, W. E.
Manuel, Archie
Strauss, Rt. Hn. G. R.


Ginsburg, David
Mapp, Charles
Summerskill, Hn. Dr. Shirley


Gordon Walker, Rt. Hn. P. C.
Marks, Kenneth
Symonds, J. B.


Gray, Dr. Hugh (Yarmouth)
Marquand, David
Taverne, Dick


Gregory, Arnold
Marsh, Rt. Hn. Richard
Thomson, Rt. Hn. George


Grey, Charles (Durham)
Mason, Rt. Hn. Roy
Tinn, James


Griffiths, David (Rother Valley)
Mellish, Rt. Hn. Robert
Tuck, Raphael


Griffiths, Eddie (Brightside)
Mendelson, John
Urwin, T. W.


Griffiths, Will (Exchange)
Mikardo, Ian
Varley, Eric G.


Hamilton, James (Bothwell)
Miller, Dr. M, S.
Wainwright, Edwin (Dearne Valley)


Hamilton, William (Fife, W.)
Milne, Edward (Blyth)
Walden, Brian (Alf Saints)


Hamling, William
Mitchell, R. C. (S'th'pton, Test)
Walker, Harold (Doncaster)


Harper, Joseph
Molloy, William
Wallace, George


Harrison, Walter (Wakefield)
Moonman, Eric
Watkins, David (Consett)


Hart, Rt. Hn. Judith
Morgan, Elystan (Cardiganshire)
Watkins, Tudor (Brecon &amp; Radnor)


Haseldine, Norman
Morris, Alfred (Wythenshawe)
Weitzman, David


Hazell, Bert
Morris, Charles R. (Openshaw)
Whitaker, Ben


Healey, Rt. Hn. Denis
Moyle, Roland
Whitlock, William


Heffer, Eric S.
Murray, Albert
Wilkins, W. A.


Henig, Stanley
Neal, Harold
Willey, Rt. Hn. Frederick


Hilton, W. S.
Newens, Stan
Williams, Alan (Swansea, W.)


Hobden, Dennis
Noel-Baker, Rt. Hn. Philip
Williams, Alan Lee (Hornchurch)


Hooley, Frank
Oakes, Gordon
Williams, Clifford (Abertillery)


Houghton, Rt. Hn. Douglas
Ogden, Eric
Williams, Mrs. Shirley (Hitchin)


Howarth, Harry (Wellingborough)
O'Malley, Brian
Willis, Rt. Hn. George


Howarth, Robert (Bolton, E.)
Oram, Albert E.
Wilson, Rt. Hn. Harold (Huyton)


Howie, W.
Orbach, Maurice
Wilson, William (Coventry, S.)


Hoy, Rt. Hn. James
Orme, Stanley
Winnick, David


Hughes, Rt. Hn. Cledwyn (Anglesey)
Oswald, Thomas
Woodburn, Rt. Hn. A.


Hughes, Hector (Aberdeen, N.)
Owen, Dr. David (Plymouth, S'tn)
Woof, Robert


Hughes, Roy (Newport)
Owen, Will (Morpeth)
Wyatt, Woodrow


Hunter, Adam
Palmer, Arthur
TELLERS FOR THE NOES:


Irvine, Sir Arthur (Edge Hill)
Pannell, Rt. Hn. Charles
Mr. Ernest Armstrong and Mr. John McCann.


Jackson, Colin (B'h'se &amp; Spenb'gh)
Park, Trevor




Parker, John (Dagenham)




Parkyn, Brian (Bedford)

New Clause 19

GENERAL BETTING DUTY

For the purposes of the general betting duty on bets made on or after 1st October, 1969, section 12(2) of the Finance Act, 1966, shall have effect as if in place of paragraph (b)

thereof (under which the amount of the duty is an amount equal to five per cent. of the amount staked) there were substituted the following paragraph, namely—
(b) shall be of an amount equal, in the case of a bet made on an approved horse racecourse or licensed track, to two and a half per cent. of the amount staked and, in


the case of any other bet, to five per cent. of the amount staked; and.—[Mr. Temple.]

Brought up, and read the First time.

5.15 p.m.

Mr. John M. Temple: I beg to move, That the Clause be read a Second time.
This is not the first occasion that I have been involved with a new Clause aimed at altering the general betting duty. I remember that in 1966 my hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies) moved a new Clause of a somewhat similar nature and in 1968 my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) tried to do the same thing. Today, I hope to prove to the Financial Secretary and the Government that the situation for on-course bookmakers and on-track bookmakers at greyhound tracks is deteriorating very considerably.
It is against that background of deterioration of the on-course betting situation and having regard to the considerable malaise in the betting industry that I move this Clause. The Government will recollect that earlier this year the levy extracted by the Horserace Belting Levy Board was doubled under the direction of the Home Office. This year there is to be a new heavy betting licence. Admittedly, this will only affect betting offices operating off-course betting, but all this taxation added together is a gigantic impost on the industry which is in effect supported by the punters.
As a revenue raiser betting duties have been fairly successful and basically my right hon. Friends and myself support the m. There are limits to all duties and I shall try to prove that with on-course betting the law of diminishing returns is now operating. The new Clause alters the 1966 Act, reducing the amount of duty to 2½ per cent. on-course from the 5 per cent. at which it stands.
I shall prove also that the on-course betting market needs a shot in the arm because a great deal depends on the on-course market in regard to that enormous industry called the stating price betting industry mainly conducted through betting offices.
The object of the Clause is clear. It was made clear by my right hon. Friend the Member for Enfield, West last year. It is to encourage the betting market on

which the starting price on racecourses is based. Significantly, Lord Wigg, who, I suppose, is the most respected expert in the racing industry, made a pronouncement on this matter comparatively recently. I shall quote from the Daily Telegraph, which is also highly respected, of 4th June, in which Lord Wigg, Chairman of the Horserace Betting Levy Board, is reported as having said:
Betting in this country is based on the on-course prices, a tiny foundation for an enormous inverted pyramid. There is no doubt that the on-course bookmaker is under considerable pressure and must be given immediate relief if racing, as we know it, is to be saved.
Those are extremely strong words—"if racing…is to be saved".
Lord Wigg probably knows more about racing than any other man in this country because, as chairman of the board, he is responsible for getting as large a number of people to attend race tracks as possible. That is why he is very interested in the preservation, and indeed in the strengthening, of the on-course betting market.
I am always a little anxious when making any forecast, because the Chief Secretary has a habit of pulling me up if my figures are not absolutely exact. I got into difficulty with the right hon. Gentleman last year because I said that I had hacked a winner at 3 to 1 on, but that due to the operations of the tax it was a 4 to 1 on bet. He said that it should have been 3⅞ to 1 on. Therefore, I propose to talk about these matters in round figures.
Last year, I ventured a forecast. I said that there would be a drop of about 50 per cent. in the amount of money changing hands on the racecourses. In fact, in the first three months of this year, there was a drop of 40 per cent. in the money wagered on all tracks and racecourses. But I was almost correct about horserace courses because the drop in the money wagered on-course on horserace tracks dropped by 46 per cent. —very close to the 50 per cent. which I forecast. This is the justification for bringing forward the new Clause again because there is no doubt that the serious situation which we forecast is coming to pass.

Mr. James Dance: I am interested in my hon. Friend's figures for


on-course betting. Has he the equivalent figure for off-course betting over the same period? I have an idea that it has gone up, whereas the figure for on-course betting has gone down.

Mr. Temple: My hon. Friend is partly right. Lord Wigg forecast that on-course betting would go down by 15 per cent. Overall, off-course betting has dropped by about 11 per cent. Therefore, the off-course situation is very much better than the on-course situation.
It has been said in several quarters that on-course bookmakers are a dying race. I again quote from the article in the Daily Telegraph:
The average age of the on-course bookmaker is 60 and it's going up.
Having a little experience of racecourses, I do not think that I should want to make a book on a racecourse unless it was a reasonably profitable business, because bookmakers face all kinds of weather and make a book under incredible difficulties, very often in wind and rain in the winter and probably in excessive heat in the summer. Nevertheless, it is the rails bookmakers who are responsible for making the starting price.
As my right hon. Friend the Member for Enfield, West explained in detail on one occasion, it is not the "bookies" who make the starting price, but the representatives of the Sporting Chronicle and the Sporting Life. But they get their information from the rails bookmakers. At two Northern meetings recently there were only two rails bookmakers operating. We cannot be absolutely certain that the betting taking place on the course is a true reflection of the chances of the horses in the race.
I come to the real difficulty of a weak course market. I understand that deputations have seen the Financial Secretary recently about the effect of hedging on-course. It was said to me that the hon. Gentleman was extraordinarily sympathetic about hedging bets on-course. But, with the operation of the 5 per cent. general betting levy, hedging on-course has dwindled almost to nothing. Therefore, the strength of the course market and its capacity to reflect the amount of money moving in it has been severely handicapped.
With a relatively weak market, it is possible to rig or manipulate the market. It is possible to make false favourites. A great deal of money goes on the favourite at the post in the starting price market. I have a little experience of false favourites. One or two let me down very badly. At small Northern meetings it is comparatively easy, in a very weak market, to influence the market so that it does not truly reflect the capacity of an animal to win.
Some years ago I had the good fortune to race not infrequently in Australia. The Australians are more devoted to racing than to any other sport, even cricket. There has been a betting tax in Australia for many years. Experience there is that a 2½ per cent. general turnover tax is too high and that all racing will stand is a 2½per cent. turnover tax. I warn the Government that the upper limit is being exceeded in all the levies and duties introduced in recent years. But, as was pointed out by Lord Wigg, the fulcrum of the matter is the course market.

Mr. John Mendelson: As a citizen who has only an occasional bet, I am alarmed by what the hon. Gentleman says. Is he saying that above a certain percentage of levy there is inevitably grave dishonesty and fraud? If so, is not this more a case for Scotland Yard than the Chancellor of the Exchequer?

Mr. Temple: I shall come to that point, because the hon. Member for Woolwich, West (Mr. Hamling) has spoken on it fairly frequently. I shall warn the Treasury about that matter.
It will be known to the Financial Secretary that the Committee over which Sir Henry Benson presided recommended a vast modernisation programme for horse-race courses. This has been accepted by Lord Wigg. A lot of the money collected by the Levy Board is going into this modernisation programme. It is not the slightest good providing better facilities if the public do not frequent racecourses. This is one of the main new arguments for an alleviation of the heavy impost on wagers made on the racecourse.
5.30 p.m.
Greyhound racing is a sport of which I know very little and to which I am not particularly attracted, but it is Britain's


second largest spectator sport. On-course betting at greyhound tracks, as reflected in duty, accounts for about two-thirds of all revenue from on-course betting. Greyhound racing is, therefore, a very significant factor in this connection. In 1968–69, the total betting duty raised on-course was about £9 million, of which £6 million came from greyhound racing.
Greyhound racing is now facing a very serious situation. Attendances have approximately halved in the last 10 years, although the number of meetings held has gone down by only about 8 per cent. The Financial Secretary will know that tracks are closing very quickly. They are very often valuable open spaces fairly near the middle of big areas of urban development. Both from the point of view of revenue and of keeping these areas of open space in urban development, the Treasury should think very carefully before deciding to keep the rate of duty so high that the greyhound racing industry is driven to the wall. The loss of revenue will be enormous.
The return on greyhound racing tracks is at present only about 4 per cent.—a very meagre return for the amount of capital involved. This is why there are so many applications for planning permission by greyhound racing organisations: the development potential of the area is very much greater than its value as a greyhound racing track. The greyhound racing world is fighting for survival, and the Revenue is vitally interested in that survival.
I warn the Treasury that owners are racing their horses overseas but that overseas owners are not bringing their horses to Britain just because the on-course situation is not as satisfactory as it used to be. As the on-course market is weakened and the number of punters and bookmakers declines, the on-course situation is rapidly deteriorating. I warn the Treasury that many tracks and courses face deep financial difficulty.
I come now to the point made by the hon. Member for Penistone (Mr. John Mendelson). I well remember the Bill which introduced betting shops. I did not welcome that Measure, but I realised that belting shops were necessary if betting was to be made legal and kept clean. I am now anxious about a deteriorating situation. I give a very severe warning that information has come to me only

comparatively recently that the present very high rates of duty must be an encouragement to illegal betting. I leave it at that, but do so as a very real warning.
We on this side want to see a thriving, healthy and honest racing industry. Encouraging the on-course bookmaker, creating a market that will be strong and will give a fair starting price to the public would be the right way to organise the betting industry. Equally, it would be right for the Treasury in the long run, because the worst thing that could possibly happen would be to have racing driven underground, as it was formerly. I very much hope that in this changing situation—indeed, in a changed situation —the Government will have second thoughts, and will accept the Clause.

Mr. William Hamling: I have several reasons for hoping that my right hon. Friend will accept the Clause. The hon. Member for the City of Chester (Mr. Temple) has told us that information has come to him about illegal betting. It has come also to me. I referred in Standing Committee to the growth of illegal betting. Looking at the returns of the small bookmakers, and some of the larger bookmakers—and the Mark Lane group as well, which is not small—one sees that their turnover is falling, and I have little doubt that the money is going to other forms of gambling.
It may be going into the gaming clubs, but I suggest that the small punter's money is going back on the streets, where it used to be, and into the pubs, the clubs and the factories. We all know that in most large factories a syndicate operates. Without mentioning names, I know that a syndicate of bookies is operating actually in a factory down the Thames. Whether the firm also pays the wages, I do not know—perhaps some of our colleagues who complain about pay might look for a job there.

Mr. Timothy Kitson: I understand that a good deal of betting goes on from this country with bookmakers in South Africa, who return the starting prices on British racecourses. Tax for bets is not deducted in South Africa. This would also seem to be an illegal method.

Mr. Hamling: I do not have the hon. Gentleman's knowledge, and I do not know how bets are shifted to South Africa, as he obviously does, but I hope that my right hon. Friend will also bear that aspect in mind. My information is that the Revenue is concerned about illegal betting, and has been watching some places. In view of the loss to the Revenue that will ultimately result and the diminishing returns that will ultimately come about, although they may not yet have done so, I regard the decision taken elsewhere in the Bill as foolish, although I would be out of order to refer to it now.
When money goes into illegal betting, all sorts of strange people start getting their hands on the "dough". Hitherto, we have managed to keep betting free from the large-scale gangsters, but I have no doubt that if illegal betting develops and more and more money goes in that direction it will prove very attractive to some of the criminal gangs which operate in this city and elsewhere in the country. I impress upon my right hon. Friend that this is no idle threat. It is a very important consideration from the point of view not only of the Revenue, but of the moral health of the nation—and, as the Committee knows, I am very strong on these moral questions.
The need is to create a strong on-course betting market to provide a reasonable basis for good starting prices, and this is one of the main purposes of the Clause. Such a market is important, not only for the on-course bookmaker and the on-course punter, but for the off-course punter as well. There is no doubt that for bookmakers on the racecourses the fixing of S.P. fixes the market for betting as a whole. This is of indirect advantage to the Revenue. If there is a strong betting market that helps the punter off-course as well as on, and this ultimately is of benefit to the Revenue.

Mr. Dance: Does the hon. Member agree that if there is a lot of illegal off-course betting a lot of money will not go to the racecourse and there will be a fictitous price?

Mr. Hamling: That is absolutely true; it is the other side of the coin. When the market is weak there is not a good S.P., but a false price. We have seen that in recent weeks.
Another aspect is the very small fields which are operating. I looked at the results of about four meetings recently and found that in three-quarters of the cases the favourite won, and in most cases it was odds-on. I suppose that there is an incentive to the punter, but very few bookmakers, especially the small ones, will keep their doors open for long in that sort of market. One has to be fair all round in this matter.
The small bookmakers to whom I have spoken recently have argued very strongly in favour of a differential for the on-course market. This would help to break down the monopoly of some very big bookmakers. I am not sure that having a monopoly for a few big bookmakers will necessarily help the small punter, particularly because he is not the sort of chap for whom the big bookmaker is looking. He is not interested in the punters, but in the big bets. The small bookmaker services the small punter. It is no good my hon. Friend the Member for Bedfordshire, South (Mr. Gwilym Roberts) shaking his head at that. If he goes into a betting shop in his constituency the proprietor will tell him that it is so. He should do that; it would improve his education. He would also meet many more of his constituents.
This differential would also help small bookmakers to put up their stands and make the courses more colourful and attractive for visitors and racegoers. One of the objects is to make going to the races more attractive. What is wrong with that? I am all in favour of improving the racecourses rather than increasing betting at home. I regard it as a healthy sport.
My hon. Friend the Member for Uxbridge (Mr. Ryan), coming from the other side of the water—the right side, where racegoing is a national pastime more than it is here—would agree with that. This would be a help to the industry as a whole. It would improve attendances, courses could be modernised and made more attractive, and it would bring owners and trainers back to the courses. It is necessary that prices should be better so that owners are attracted and money, tourists and visitors are brought to this country.
That is the advantage of the new Clause. After these remarks, I am sure


that my hon. Friend the Financial Secretary will be only too eager to accept it.

5.45 p.m.

Mr. W. R. Rees-Davies: I join in what has been said, adopt it, and agree with it. The purpose of having a racing industry in this country, having races and a bloodstock industry, is to enable people to enjoy a way of life, the sport of kings—which is racegoing, not telly-watching. Therefore, we should assist one of our major sports not to perish under an undue burden of taxation.
The difficulty is that there is an increasing burden of taxes year by year upon the racing industry. It has reached levels which now show clearly the law of diminishing returns. I am not so concerned about the returns as to prove categorically that we must have a differential between those concerned in participation in racing as opposed to those who merely want to enjoy betting. Those two are quite separate and distinct in principle.
It is unique that everyone concerned with racing agrees with this new Clause. It is very unusual to find the racing industry agreeing about anything, but I have found recently that a large number of bookmakers in London and in the country, those concerned with judging, those concerned with the Jockey Club, with trainers, owners and racecourses all agree in principle with this new Clause.
The Racing Industry Committee of Inquiry said in June. 1968, that there is
…a strong case for assisting on-course bookmakers by remitting the tax on course.
Lord Wigg has already been quoted. Major-General Sir Randle Feilden said the same on behalf of the Jockey Club and the stewards. The trainers have all agreed that it is most important to have a differential between on-course and off-course betting, however high it may be. The jockeys agree, the owners agree—

Mr. Hamling: Even the horses.

Mr. Rees-Davies: Of course, the horses agree because it will be to their benefit as their breeding will be all the better. The Government must concede the principle today. We should be quite clear that this year it is the intention of the House of Commons, both parties—the Liberal Party as usual, is not present,

but leaving them out as one always does in matters of sport—

Mr. Hamling: What about indoor sport?

Mr. Rees-Davies: I was about to say pleasurable sport, I hope we shall have this inured as a principle.
International competition in horse-racing is growing fast. The Japanese are interested and so are the Germans, the French and the Americans. They are all beginning to recognise that with the coming of the jumbo-jets sport is international. Colour television militates against race-going. In the year ahead we shall find whether there is an opportunity to see such a perfect picture of the Royal Enclosure at Ascot and perhaps next year there will be an even greater wish to take the idle way out and not to go to the races but to telly-watch.
Another factor is that off-course betting is so much cheaper. If there is removed one of the only real advantages of going to the races, which is that one may get a better price to bet, and one gets no financial advantage but has to pay 30s. or £2 to go on to the course, one asks, why carry that heavy additional burden? Why should one do it in face of the greater difficulties of traffic to and from the course? The racegoer often has a difficult and costly journey in heavy traffic. He has the burden of paying the entrance fee. He then has to spent his money there. Bookmakers have high overheads for their staff on course, in addition to the cost of entry.
There is also the fact that the United Kingdom has infinitely lower prize money than overseas countries have. As a result, most of our leading owners have at least one French trainer and at least one horse being trained in France. This year the number is rising considerably.
Therefore, we must seek to encourage people to go to the races and the owners to keep their horses here. We must encourage foreigners to send their horses here. I have noticed a desire on the part of people overseas to become owners in Britain. There is room here for a substantial invisible export by encouraging overseas owners to send their horses to trainers in Britain.
This is why I say that, whatever the tax be, it should be half on course. It stands at 5 per cent. at present. It will


be virtually 6 per cent. There will be a 5 per cent. tax plus an additional 1 per cent. on the rateable value. Some of the small bookmakers, if they were given the advantage which would accrue from the Government's accepting the Amendment, might, as they will have to do anyway, give up their premises and form a small body and become on-course bookmakers. This year there is a fall of 20 per cent. in the number of bookmakers on course.
I ask the Financial Secretary to make it clear that this procedure will be adopted and to say in terms that action will be taken by the Government to reverse this tendency of diminishing attendances on course, with the resulting diminishing turnover. As my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) pointed out in Committee, the position of the Tote is deplorable. Many racecourses must close because racecourse profits are down considerably. There was a heavy loss of £10,000 even on Eclipse day at Sandown. That should have been one of the leading days of the year. If there was a loss on that day, hon. Members can imagine the losses which have occurred at other racecourses. Practically all the bookmakers who are remaining on the rails are doing so not for profit but for show —to sustain their reputation off-course.
I do not think that the Government have recognised that it is easy to be perfectly lawful and place bets in Jamaica and Singapore and thereby pay no tax. I leave this with the Government as my final thought. This is going on extensively. I do not know whether the Government recognise that there are a large number of people in Hong Kong, Singapore, Jamaica, the Bahamas, France, the Canary Islands, Pakistan and India who bet on races in the United Kingdom; they bet regularly in their own countries on the outcome of British races. They do not even have the benefit of television to watch the racing. This is potentially a large industry. All of those who use the market presumably do not pay the tax.
It would be sad if there were a reversion to the old position. I was one of those concerned in pioneering legislation on betting. I always did so with the feeling that the bookmaker should be

able to become rather like the publican. My aim was to make the bookmaker into a respectable man with a strong community sense and with great pride in his job. We wanted to take the bookmaker off the streets. This has happened. In the great majority of cases bookmakers are now in a similar position to publicans.
However, there is here a tendency to go too fast: under this Government the tax of 2½ per cent. as at 1966 was increased to 5 per cent. in 1968. Now there is to be a further tax which will make the tax much higher than even the betting industry of Australia would begin to have with its 2 per cent. on turnover. This is higher than we can stand.
It is for these reasons that I commend the Amendment to the Government. It is one which my right hon. and hon. Friends and others would like to see enshrined in principle in the Bill and we hope very shortly carried into effect.

Mr. Albert Roberts: I have been impressed by the three speeches which have been made. I shall speak in support of greyhound racing. A Home Secretary said many years ago that if his family was in mortal danger apart from saving himself he would save his wife and his horse. I would try to save my wife, my dog and myself.
The sport of greyhound racing as I know it can be well recommended to the general public at any time. I was surprised at the admission by the hon. Member for the City of Chester (Mr. Temple) that he knew little about it. I believe that greyhound racing is good value for money, particularly in London, where it is a good, clean, open sport. One can go at any time of the year in comfortable surroundings and have a West End meal at a much lower price. That is why I am anxious to save my dog.
From time to time there have been vicious onslaughts on greyhound racing. From 1948 to 1964 it bore a 10 per cent. tax which was imposed by Sir Stafford Cripps when Chancellor. In 1948 there was far more money than goods and there was no objection in the main, because crowds were going to greyhound stadiums.
Today, it is a case of diminishing returns. The Betting and Gaming Act, 1960, created betting shops and gave freedom of action in that sphere which was


denied to greyhound racing. It is time the Chancellor considered what action to take about betting in general. Over the last few years it has been a case of hit and miss. It required a great deal of persuasion before anything was done about bingo and one-armed bandits. I believe that a proper review of the position would result in benefits being given to on-course betting at the expense of off-course betting.
The question of high pressure, particularly where there is urban development, has been referred to. A few days ago there were newspaper reports of offers for Wimbledon Stadium. When all is said and done, we have to consider the position of shareholders, but as Members of Parliament we must consider also what is good for the public and whether a place like London or some of our provincial towns really need good clean outdoor sports of this kind. If these tracks disappear, not only will it be a loss to the general public but it will be a great and sad loss to any Chancellor of the Exchequer.
6.0 p.m.
It is in the national interest and the local interest that we should not be forced to accept the way these changes are going. If the Chancellor will only give due consideration to the situation as it is now, some of our tracks, particularly in the larger centres of population, will start once more to flourish. Aggregate trading profits over the past few years, notably in 1968, have been very little more than 4 per cent. in relation to assets, a very low standard in comparison with present-day industry.
Attendances have been falling over the past 10 or 12 years and are continuing to fall. If the decline is to be arrested, the Chancellor must adopt the course embodied in new Clause 19. He must give every encouragement to people interested in the sporting world to visit courses and not just stay at home. I think that I can speak impartially on this matter. I have heard what hon. Members have said on both sides, and I have read a little on the subject. I am greatly concerned when I see sports which are good for the public folding up almost overnight simply because those responsible have not given due consideration to the problems. The hon. Member for the City of Chester said that the racing is the

second largest spectator sport, in spite of dwindling attendances. It is in great jeopardy now, and action must be taken either at once or in the very near future.
I give wholehearted support to the Clause because it provides that advantage could be given to on-course betting as compared with off-course betting. A man who is prepared to go to the course and watch the sport is really interested, he wishes to be entertained at a sporting event where one finds no hooliganism, at which one can spend two or three hours in good pleasure and enjoyment of a good clean form of racing. Such a purpose can do nothing but commend itself to the House as a whole. I am sure that other hon. Members will support it and urge the Chancellor to help a sport which is now in jeopardy.
There are those who have said scathing things from time to time about horse racing and greyhound racing. As a regular churchgoer, I say at once that I have attended this sort of sport in various parts of the country. I am convinced that it is a sport which can readily be recommended to anyone not familiar with it. It is my hope that the Chancellor of the Exchequer will give due consideration to what is urged upon him so that a sport which is good for the public can be maintained and encouraged.

Earl of Dalkeith: It is unusual to find an atmosphere of such harmony and peace prevailing in the House. I warmly support everything said so far in commending the new Clause, including the two speeches of considerable good sense which we have heard from the benches opposite. I had thought that the hon. Member for West Ham, North (Mr. Arthur Lewis) would lead for his own side, but perhaps he will wind up. I hope that he does, because we can expect a favourable answer from him.

Mr. Arthur Lewis: Fortunately, or unfortunately, I am not the one who decides which Members should be called. Otherwise, I should probably have called myself first.

Earl of Dalkeith: Perhaps the hon. Gentleman will wind up for the Government, in which case we can rely on him for the right answer.
I support the case which has been made in respect of horse racing, but my


primary concern in this debate comes from my first-hand knowledge of greyhound racing in my constituency. Because of the problems facing greyhound racing which are daily becoming more plain, and because of the anxieties which I have on that account, I add my voice in an effort to persuade the Government to heed the arguments put in support of the Clause.
The declining profitability of greyhound racing is now so serious that it could easily lead to the closing of many excellent establishments. This is no mere repetition of arguments which have been put forward year after year. The warning has been given year after year, but now it must be heeded if some important tracks are not to close. There have been references to the law of diminishing returns. The Chancellor must pay regard to that, but it is not the principal standpoint from which I argue the case.
A community of the size of Edinburgh —there are countless others of the same sort of size—deserves to have a high-quality stadium of the kind which we have at Powderhall. If there were not such an establishment already there, a strong case could be made for one to be built, and, what is more, I have no doubt that a request could be made to the Minister for Sport to provide a grant to assist its building. When we have a track such as Powderhall in existence and contributing so much to the life of the city, it would be a tragedy if we sat back and allowed it to die. That would be bad enough, but if the Government reject the new Clause they will do something even worse; they will deliberately run the risk of directly killing tracks such as Powderhall.
It can be argued that there are other factors which contribute to the decline in attendances, but these are not matters over which anyone has immediate control. The pool betting duty, on the other hand, and the manner in which it is levied is in a different category; it can be adjusted at the will of the right hon. Gentleman. In considering what to do, he must ask himself the simple question: is it desired to allow greyhound racing to survive, or is it intended that it should be killed? It is as simple as that.
We are not asking for State aid for a non-viable industry, as happens from

time to time, and as I may do on occasion in regard to certain sectors of farming. This is a totally different matter. It is a case of asking that a penal provision which is preventing a venture from being an economic success should be removed or alleviated. When it is in respect of a venture giving pleasure to countless thousands, the Government would be sensible to listen to this plea.
For many years greyhound racing has been unfairly discriminated against as compared with other sports. The rates of duty have been varied from time to time to take account of the circumstances. This means that the Government are not being asked to depart from precedent. They are being asked to accord with precedent in accepting the Amendment.
There is no reason why the Inland Revenue should suffer any loss from the sort of adjustment envisaged to the rates affecting on-course and off-course betting. It could put the law of diminishing returns into reverse and result in a gain, which would be to the nation's advantage.
It might be held that by lowering the rates on on-course betting and increasing the rates on off-course betting we should be unfair to those who have betting shops and the like. But in the long run if greyhound racing collapses because of the taxation burden those who own betting shops will stand to lose as much as, if not more than, anybody else. Therefore, I do not think that even from their point of view the change would be unfair.
One significant feature of today's debate compared with previous debates is that previously these points were generally speaking, put forward from the greyhound racing lobby, but this year we have been joined more strongly than ever by the horse-racing fraternity, and it is excellent that we should see this unity.
The situation in my constituency is particularly worrying, because one of the reasons for the decline in attendance at Powderhall is undoubtedly the savage squeeze on the pockets of Edinburgh people because of the incomprehensible way in which the Government are treating Edinburgh in the matter of development district status. I shall not enlarge on that, because I suspect that I should be out of order.
If the Government ignore our plea and Powderhall dies as a result, I shall make it my business to ensure that it is as widely known as possible that the reason for its death was the Government's failure to listen to this elementary, simple and straightforward Amendment. I might even go so far as to erect a memorial tombstone engraved with words such as, "Powderhall: murdered by Roy Jenkins".

6.15 p.m.

Mr. Arthur Lewis: The hon. Member for Edinburgh, North (Earl of Dalkeith) began his speech by making a remark about my activities and speculating on why I had not spoken earlier. The real reason was that I wanted to hear one of the best speeches this afternoon, which came from the hon. Gentleman, and so I had to wait until he had spoken.
It is right to say that I have expressed interest in this subject for nearly 21 years now. I well remember how on this and similar subjects I was the lone voice in the early days, and almost everyone in the House was against me. It was then thought infra dig to speak here on behalf of greyhound racing. In those days I was disparagingly referred to as the spokesman for the dog-tracks. In view of my rather slim figure, I did not have to declare an interest in dog tracks then, and I do not have to do so now.
I am glad to see the hon. and gallant Member for Wembley, North (Sir E. Bullus) present. He and I started to take an interest in the matter because it is not only a question of greyhound racing. Some of our greatest sports have been developed and improved because of greyhound racing. We should all like to obtain tickets for the Cup Final, although we are not always successful. Wembley Stadium would not be in existence but for the money it was able to earn from greyhound racing, to keep it ticking over ready for those odd days when it presented the Cup Final and other football matches. One finds the same sort of thing all round the country.
I think that the hon. and gallant Member for Lewes (Sir T. Beamish)—a marvellous name for a constituency—has had to leave the Chamber to go to a meeting. But I am sure that he will not mind my speaking about his interest in greyhound racing. He is a director of the Greyhound Racing Association, the

largest greyhound racing organisation. I have no connection with it, although I know some of its directors, and on a few occasions I have been to the Greyhound Derby. I think that the right hon. Member for Enfield, West (Mr. Iain Macleod) was lucky enough to go to the last one. I do not know whether he was lucky, but he went. He probably was lucky. I hope that he was.

Mr. Speaker: Order. I hope that we shall not be too discursive in this debate.

Mr. Lewis: I am trying to explain why it is essential that we should have a differential in the on-course and off-course betting tax. I am sure that White City, which is one of the Greyhound Racing Association tracks, and which puts on the Greyhound Derby, makes quite a lot of money out of that venture. It is from such ventures that it has been able to help athletics, the Horse of the Year Show, and the like.
I here declare an interest. I was one of the original Members to press the Treasury to impose fair taxation on all forms of betting, gambling and gaming. A former Chancellor paid a tribute to me when he introduced the taxation on horse-racing. But I emphasise that what I wanted to see was a fair system of taxation. I agree with the noble Lord the Member for Edinburgh, North that for years greyhound racing was discriminated against. It paid the 5 per cent.—originally 10 per cent.—Tote tax, and horse-racing got away scot free. Now there has been some levelling up, but there is still the difficulty and unfairness that many big tracks are having to close down or, as in the case of White City and some of the others, to sell off some of their property for development, and/or reduce the size because there is a falling off in the number of supporters going to the tracks. One of the reasons for this is that people find it much better and easier not to pay to go to the track but to bet at the off-course betting shop.
Here I declare an interest, and shall speak against my own interests. I have the dubious honour of having in my constituency the largest number of betting shops in any borough in the country. West Ham, Newham and East Ham together have the largest number of betting shops of any town in the country.
should like to see fewer betting shops everywhere. We could do this by


trying to channel back to the tracks some of the money now going into betting shops. If we could achieve this, the Treasury would, in my belief, get a bigger return and there would be more money for the promoters—the same argument applies to horse racing—to develop not only greyhound racing but to help improve track facilities and make them more attractive to the public as well as to help in the development of other sports, such as athletics, tennis, cricket, swimming and football. All of these have been helped in the past because of the money being spent at the tracks.

Wing Commander Sir Eric Bullus: Does the hon. Gentleman recall that the late Sir Arthur Elvin used to point out regularly how much the Olympic games held at Wembley owed to the fact that greyhound racing was successful at Wembley, and that this had advantages for other sports as well?

Mr. Lewis: I am glad to be reminded of that, and the hon. Gentleman is quite right. Strangely enough, it was because of greyhound racing that Wembley became an internationally-known place through its association with football and the World Cup. There would have been no Wembley Stadium at all had it nor been for greyhound racing there.
There is the question of the law of diminishing returns. I am all in favour of getting as much money in taxation from betting, gambling and gaming as it is possible to get reasonably without killing the sport. Someone reminded us in a recent debate on this issue that we must not kill the goose that lays the golden egg but that is precisely what has been happening over the years. Indeed, the Government have killed the goose in one instance. They have killed the whole return on income from fixed-odds betting.
One of the biggest bookmakers in the world—indeed, it is claimed to be the biggest—is William Hill. William Hill himself has been a Socialist all his life and a very good and active one. He has had to finish up his fixed-odds betting in football pools and horse racing because taxation has killed it. That is the sort of thing happening now. Because of the unfair method of taxation, we are killing the sport.
New Clause 19 would mean that there would be a differential between the tax on those who go to the tracks and the tax on those who bet off the tracks. If a person knows that he is going to get better odds at a local betting shop, he will go there and will not incur the expense of travelling to the track and paying the admission charge and programme charge. Does my right hon. Friend the Financial Secretary to the Treasury want to make a witty remark, because I should like to hear it?

Mr. Harold Lever: Later.

Mr. Lewis: Very well. I believe that what I have explained is what is happening to most tracks in the country. My hon. Friend the Member for Normanton (Mr. Albert Roberts) mentioned Wimbledon. I have been there a number of times in his company. It is good spectacle and it is a first-class track where one can take one's family. If the tracks find that their competitors in the betting shops are privileged in relation to taxation, it is no wonder that the chances are mounting that the tracks will be taken over or closed down, because people can make a better return for shareholders out of property development than out of greyhound racing. I cannot see why the Treasury should not accept new Clause 19 and why it would not be advantageous to the Treasury if it was to allow a differential to on-course bookmakers so that money was encouraged to go to the track.
Such a course might, in the long run, have the effect of closing down a few unnecessary betting shops, which is what I want to see. In my constituency, there is a betting shop in almost every street, and this is quite unnecessary. If we encourage people to go back to the tracks, we could close down some of the less necessary of these shops. There would, therefore, be an advantage from that point of view as well as from the point of view of the development of sport generally. I ask my right hon. Friend to give favourable consideration to new Clause 19 and having a differential between on-course betting and off-course betting, whether it be on horse racing, greyhound racing or anything else. It would be to the advantage of all concerned.

Mr. Eldon Griffiths: The most remarkable feature of the debate is the unanimity of opinion from a great variety of sources in the House. I support new Clause 19, so ably moved by my hon. Friend the Member for City of Chester (Mr. Temple), for two reasons, one particular and the other general. The particular reason is that I have in my constituency the horse-racing capital of this country and possibly of the world—Newmarket. There we have many thousands of splendid horses and some thousands of splendid people who look after them, train them, race them and sell them. I am, therefore, most anxious to do anything to assist the racing industry.
In Newmarket, we have a number of bookmakers—although perhaps not so many as the hon. Member for West Ham, North (Mr. Arthur Lewis) has in his constituency. I know many of them well. There is no more cheerful, hard-working and, at the moment, hard-pressed section of the community. I am sure that new Clause 19 would be of material help to them.
My general reason for supporting new Clause 19 is the very high rate of taxation, and especially the high level of taxation on on-course betting. This is damaging to the racing industry as a whole and is a serious matter nationally, because racing gives great pleasure to very large numbers of our fellow citizens. It provides the Inland Revenue with a substantial amount of money which it would find difficult to obtain from other sources, and racing is a strong earner of foreign exchange. It is, therefore, important that the good health of racing should be recognised by this House.
6.30 p.m.
I am fortified in these conclusions by the Benson Report, paragraph 60 of which contains these words:
There is insufficient money circulating in the industry to maintain or improve the present standard of racing; to match competition from overseas; and to maintain the bloodstock industry.
I ask the Financial Secretary to note these wise words:
In consequence, the racing industry in this country is deteriorating and it is losing ground as compared with racing in overseas countries.
The next paragraph underlines the case:

Recent increases in taxation have placed exceptional burdens on the racing industry which are greater than those borne by other industries.
The Benson Report gives further support to the new Clause by showing how drastically attendances at racecourses, where on-course bookmaking is general, has been falling. In 1958 the total attendances at flat and national hunt course meetings was 8,100,000; by 1964 it had fallen to just under 7 million; it is now barely over 6 million. There has been a decline in attendances at racecourses from well over 8 million to a little over 6 million during the last ten years, and this is a serious matter.
I do not say that the betting tax or the absence of a differential are the only or even principal causes of this decline in attendance. There are many other factors such as the weather, traffic, the habit of watching racing on television and the fact that we still have far too many race tracks, but I have no doubt that the betting tax, and particularly the absence of a differential between on-course and off-course rates, is the largest single factor in pulling down racing and the bookmaker.
I draw from two respected commentators in the British Press these comments; first, from the Guardian, where Mr. Richard Baerlein wrote this on 13th March this year:
If the Chancellor does not agree to a reduction in the tax on on-course betting, then course bookmaking is finished, and racing will take one further serious knock—a knock which could easily end in a complete k.o.
To go to the other side of the political spectrum, to the Daily Telegraph, the racing correspondent said this:
Without doubt the biggest factor contributing to the fall-away in attendance…is taxation. The initial impost of 2½ per cent. in October 1968 rocked an already shaky industry back on its heels. The subsequent double-up in March last year may have been the final blow.
These are not my words, but the words of intelligent commentators who have at heart the best interests of the industry.
The figures make the case overwhelming. The on-course turnover has fallen from £133 million in 1967–68 to £103 million in 1968–69. That is a fall of 22½ per cent. over the last 2½ years. Since then the position has deteriorated. In spite of a late Easter this year and nine


more fixtures, which incidentally put off-course betting up by 9 per cent., there has been no effect on the accelerating slump in on-course betting. In April of this year, the last month for which I can obtain figures, on-course betting fell by another 10 per cent. to £458,000, and this figure is not enough to keep body and soul together in the bookmakers' fraternity. Comparing January, February and March of the financial year 1967–68 with the same three months of this year, the on-course turnover fell by more than 40 per cent. As I have said, there may be other factors, but the absence of a differential between the tax on on-course and off-course betting is the main factor in bring this about.
I would like to give one or two specific examples, more eloquent than all the arrays of figures. In Tattersalls Ring at Epsom this year the number of bookies attending has fallen very dramatically. Whereas ten years ago on average there were not less than 75 bookies in Tatter-sails, today there are seldom more than 60. It is the same in the Silver Ring, down from 33 to 24, and Langlands, down from 23 to 10. The average number of bookmakers on our racecourses on any racing day in 1959 was 145. Last year it was 90, and this year it will be down to little more than 80.
The Financial Secretary will have all the evidence, but if he will examine the charts drawn up by the British Bookmaker, he will find in the sharp decline in bookmakers' attendances in racecourse enclosures that there was a steady downward trend, but just before the introduction of the 2½ per cent. tax. it had levelled out. The tax was imposed and there was a further sudden drop. When the tax was increased to 5 per cent. there was again a precipitate drop. The Financial Secretary can place no other interpretation on these figures than that which has been given this afternoon by my hon. Friends.
I wish to mention one or two other individual cases because bookmakers are individuals like the rest of us. Last January at Newbury one bookmaker who has many regular customers took, not made, only £213 from six races. Another bookmaker provided the Customs and Excise forms which showed that all he could gather during the entire proceed-

ings was a miserable £7. At Nottingham another well-known bookmaker, Mr. Norman Fogg, kept his records and sent photostats of them to Lord Wigg. The records showed bets placed with him of 10s. on the first race, two guineas on the second and 2s. on the third. Mr. Fogg, after that, went home, and after paying his staff and his betting tax, which admittedly was not very much, he estimated that his net loss for that day was more than £20. This may be an exceptional case, but Mr. Fogg's experience as a bookmaker is by no means untypical these days. The average bookmaker in Tattersalls Ring nowadays pays £12 for his betting badge, £3 for his own entrance fee and a further £9 for the entrance fee of his three assistants. He also pays 10s. to the Bookmakers Protection Association, 7s. 6d. for his racing lists, and 10s. or more, when the Bill is passed, for his S.E.T. The outgoings of an average bookmaker on an average day add up to not less than £26 or £27.
What about his income? To give reasonable odds the bookie has to keep his gross profit down to about 10 per cent. If he takes, say, £1,000 in bets, which is a realistic figure, he can expect to make £100 gross. From his £100 gross he must first deduct the £50 tax—5 per cent. of his £1,000 turnover—and a further £25 7s. 6d. for his other expenses which I have indicated. From the remaining £24 12s. 6d. he has to pay the wages of his three assistants, his travelling expenses, and buy his food. And all this on not a bad day at one of our normally quite popular meetings. There is very little in it for the on-course bookmaker. The off-course bookmaker does not have to meet these many charges. The case which has been made out is quite overwhelming and is unanimous.
I want to put two final points to the Financial Secretary, because there are other considerations in the matter of differential. The first point is that there is no doubt that it stimulates tax avoidance. The second is that it weakens the Government's own long term prospects of keeping up their revenue from the betting and race course industry.
On the matter of the positive encouragement of tax avoidance, I would refer to a most excellent article which appeared in the Daily Telegraph of 6th April and


was republished in the Sporting Life. The article said:
…people are getting together in clubs to bet illegally. In the sporting papers one can often see advertisements for clubs with 'tape and blower services available': these are often places where big backers can go, get odds direct from the course and bet on an undeclared book. Sums change hands in these clubs which would scare the course silly.
Here is tangible evidence of sizeable tax avoidance, and I suspect the Financial Secretary has included Clause 53 in the Bill in part because he is aware of this growing problem.
It seems to me that the Government are in danger of damaging their long term prospects of revenue. A collapse of the on-course betting market—and such a collapse is now possible—would imperil not merely the whole betting market, because it is the on-course bookie who makes that market, but it could, perhaps more easily than the Treasury realises, put at risk off-course betting and with it the entire racing industry.
Last year revenue received from the betting tax was over £54 million. That is a very large sum indeed to put at risk through over-taxation. I submit that the Chancellor is being greedy. He wants to have his cake and eat it, and he would be wise to accept the arguments put forward this afternoon. Perhaps the best answer would be to reduce the tax overall. But he will not, of course, accept that. However, he ought to give some relief to the hardest pressed section and the section which makes the bookie market, that is to say the on-course bookmakers. It is a choice between those who go to the tracks and those who sit at home. For the benefit of the industry as a whole, for the benefit of the revenue and of lawful taxation, it would be in the interests of the Chancellor of the Exchequer and of this country to create this differential and to do it today.

6.45 p.m.

Mr. John Ryan: I intervene briefly in the debate to urge the Financial Secretary to accept the new Clause. I intervene with some hesitation because I have no particular constituency interest. My hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) described his constituency in a way that would almost make an ideal sating for some escapade by Damon Runyon. However, I have no such problem in my own constituency.
I intervene because I feel that the Financial Secretary ought to consider the many social implications in the present arrangements for the taxation of betting. It is the experience of those of us who represent urban areas that the legislation and licensing of betting shops removed one of the grosser evils, namely, the street bookie and the attendant petty crime and illegal activity that surrounded him. I felt that this was a great step forward.
We are now getting to a point when we face situations such as exist in my own constituency at London Airport where illicit betting is taking place. The tax is being avoided by the operation of syndicates within the airport. This is a most retrograde step and is extremely difficult for the police to deal with. People will not give evidence against their workmates and they will not jeopardise family connections which they feel are providing a service. In the general context of the betting tax, we may well be reaching a situation of diminishing returns. In the social sense, we seem to be bringing about an increase in illicit betting which is what originally we have sought to avoid.
I close by mentioning the differential tax suggested as between on-course and off-course bookmakers. There is a strong element of moral overtone to this debate. Many people regard bookmakers as people who get a living out of racing. A bookmaker takes more out than he puts in or he would not stay in business. If one accepts this situation, then there is a differential input between the bookmaker who goes to the course and the bookmaker whose transactions have no place on the course.
If the Financial Secretary accepts the new Clause, he would conform with other aspects of the Government's policy in regard to tourism. Our racing is the admiration of the world. The decline of on-course betting is an integral part of the general problem of attendancies at race courses. It is a problem which should be put right not only in the interests of racing but in the interests of tourism. With those few words, I would ask my right hon. Friend to accept the new Clause.

Mr. Harold Lever: This has been an impressive debate for the unanimity of opinion in support of the proposal in the new Clause. I shall indicate right away


that the Chancellor has always had firmly in his mind many of the considerations which have been pressed upon us today in argument. I know that at this stage of the Finance Bill it is high season for geese laying golden eggs, although I do not recall any occasion which has been as roughly treated by my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) in his brief intervention. I take the point that one must take care in the imposition of the duty that one does not go into the famous area of diminishing returns. We have not done so in spite of warnings.
Many people seem to feel that the market is in danger unless the Chancellor makes a sharp differential between the on-course and off-course bookmakers. Nobody has mentioned that for the first time this year a differential is made between the two. The Chancellor has imposed a duty on off-course bookmakers, for which he has exempted on-course bookmakers, in the form of a rateable value duty charge. For the first time there is something approaching a 1 per cent. differential between the on-course betting duty and the off-course betting duty which will reflect marginally to the advantage of the on-course bookmaker.
Those who advocate making this concession have rather overstated their case in believing that it will reverse a trend which has been going on for many years. Long before there was any duty on horse racing there was a decline in attendances at meetings. Many hon. Members have recognised that it was going on long before the duty on horse race betting was introduced. I notice that my hon. Friend the Member for Normanton (Mr. Albert Roberts) is present. He is both a churchgoer and racegoer and is probably in a position to know from both his attendances that they tend to decline even when they are not taxed. There may be a long-term trend in one direction which only the changing psychology of people will alter after an interval of time.

Earl of Dalkeith: It is true that attendances at greyhound race meetings have been declining for some time, but greyhound racing has been singled out for discriminatory taxation for many years, and it is still continuing.

Mr. Lever: The noble Lord is wrong in supposing, as he implies, that greyhound racing attendances declined because they were singled out for taxation over many years. That is not so. Horse racing attendances declined in the same way although they were not subject to tax. In fact, horse racing was given a differential advantage over greyhound racing in which greyhound racing was heavily taxed and horse racing was never taxed. Nevertheless, both attendances declined together.
Hon. Members have to be candid with themselves. The attractions of colour television and the tendencies of family life these days all have an effect on attendances at race meetings, taxed or untaxed. I will not go into all the social philosophising which goes on about the recreational aspects of our lives, but all have an effect.
We shall brood carefully over everything that has been said, and we shall watch to see whether any of the dire consequences on the market develop. We are concerned at the warnings of hon. Members about the danger of the growth of illegal betting. This becomes very important. I know that when we have discussed the betting tax on previous occasions some hon. Members have tended to think that the rates were very low. I think that that is because they do not understand the weight of this duty on a turnover of the betting kind.
My right hon. Friend the Chancellor of the Exchequer is aware of these problems, and we are keeping a close watch on the situation both from the point of view of preserving the market on-course and from that of preserving the duty.

Mr. Arthur Lewis: I am grateful for my right hon. Friend's promise, but can he given an assurance that in keeping a watch on the situation he will not do it to the extent that it was done in the case of fixed odds pools on football and horse racing, when it was watched for so long that that form of betting went out of existence?

Mr. Lever: I cannot remember promising to keep an eye on fixed odds pools—

Mr. Lewis: I meant the Treasury not my right hon. Friend personally.

Mr. Lever: My hon. Friend is raising a different point where a duty was fixed


in relation to an activity, and it was brought to an end because the duty was so high. Whether justified or not, that is a separate question.
While I have to reject the proposals which have been put forward, I assure the House that we shall take fully into account all the matters which have been pressed upon us. The remedy proposed by the Clause will not really achieve the great and dramatic ends urged by its advocates.

Mr. Eldon Griffiths: My hon. Friend the Member for the City of Chester (Mr. Temple) or my hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies) pointed out to the right hon. Gentleman that, even if he could not accept the Clause as it stood, it was hoped that he would comment on the principle that there should be a differential for the many reasons which have been put forward.

Mr. Lever: I have already made one comment about the principle and said that we have brought in a differential this year. It was a matter closely in my right hon. Friend's mind in coming to his decision. I do not say that that is the last word on betting tax, but we have shown already some recognition of the fact that we wish to impose a lighter burden on on-course betting compared with off-course betting. From this year on, there will be a lighter burden on on-course betting. But certainly we shall keep in mind the other point made by the hon. Member for the City of Chester (Mr. Temple) about the problems of the market in laying off, placing bets and the like. But I cannot accept the Clause, and I have to ask the House to reject it.

Mr. Iain Macleod: I am grateful for the support of hon. Gentlemen opposite for the Clause. However, I hope that they will not mind if I express the hope that they have now exhausted some of their eloquence. If they talk one for one with us throughout the Report stage, we shall be here for another week or two. Although that does not worry me, it might worry the Chancellor of the Exchequer and even Mr. Speaker in due course.
I agree with much of what the Financial Secretary has said, though I do not

think that he can base any part of his case on the fact that by the betting premises licence the Government have introduced a sort of Irishman's rise in a differential by taxing even more savagely those who do their betting in shops. That is not relevant to the point with which we are concerned.
I want merely to emphasise two matters, and I do not intend to ask my right hon. and hon. Friends to divide the House on this Amendment.
First, the right hon. Gentleman said that he would look carefully at the evidence that there are some signs, not yet formidable but beginning to be seen, of an element of illegal betting coming back. Naturally, at this time of the year I get an enormous postbag, and there is clear evidence from many different parts of the country that the runners are again going into the factories and that men are again standing on street corners. This would nullify much of the work which both sides of the House have tried to do over recent years.
The second and only other point which I wish to make is to emphasise to the Financial Secretary the key importance for the health of racing of a strong on-course market. Although overwhelmingly the weight of betting is off-course, the prices are determined entirely by the betting that is on-course.
I will not go into the details of how it is done. I did that in the debate on a similar Amendment a year ago. It depends on the absolute integrity of two racing journalists taking the prices that are ruling on the rails at the moment of the "Off". Those prices are accepted at once and without question not only in this country but all over the world. The health of racing depends to a great degree, therefore, on whether the on-course market is sufficiently strong.
I am closely interested in these matters, and I have studied the Benson Report carefully. I do not agree with all its findings, but I believe that there are only two possible solutions to the sort of situation which we have now. One is a Tote monopoly and the other is a strong on-course market. I know the arguments for a Tote monopoly, but I do not want to see it. I like the pattern of racing that we have. I prefer the participation of the bookmakers.
That pattern of racing needs a strong on-course market. If the market is desperately weak, and the tail is wagging a very big dog because the prices returned influence many millions of pounds in the betting shops and, indeed, all over the world, it is easier to rig it. It follows that, with a very weak market, a comparatively trifling amount—£200 or £300 —sent back through the blower on to the courses could give an entirely artificial return and, therefore, although in a perfectly open way, could rig the market. If that on-course market is strong, £200 or £300 would be nothing. Nor would £2,000 or £3,000, for that matter. It would be absorbed. On a really strong market like Epsom on Derby Day or a Royal Ascot meeting, the market cannot be rigged because the money is too strong.
7.0 p.m.
What concerns us, and I am sure that it concerns the financial Secretary, is that in the ordinary day's humdrum racing, as my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies) said, there has been a fall of about 20 per cent. in the attendance of on-course bookmaking. This has reflected itself in turn in the weakness of the market, and this lays the way wide open to undesirable possibilities.
I draw these two points seriously to the attention of the Financial Secretary, who has shown that he is aware of them. I believe that the principle is right. The money is not very large, but I think that there ought to be a clear differential between the tax on on-course betting and the tax on off-course betting. I hope in a not-too-distant future Budget that will come about.
The Financial Secretary has shown himself to be well aware of the matters which have been pressed from both sides of the House. Therefore, I am content that the new Clause should be negatived.

Question put and negatived.

Mr. Speaker: Perhaps it is convenient to remind the House that we have ahead of us, in the two remaining days on Report stage, 40 debates at least. Therefore, reasonably brief speeches will help.

New Clause 31

LIABILITY OF CHARITABLE DONATIONS TO DUTY

For the purpose of any assessment to pool betting duty made after 5th April, 1969, the proviso to section 7(2) of the Finance Act, 1964 (which exempts the amount of certain charitable donations from the charge to pool betting duty) shall be read and construed as if the last fourteen words thereof had never been enacted.—[Mr. Higgins.]

Brought up, and read the First time.

Mr. Terence L. Higgins: I beg to move, That the Clause be read a Second time.

Mr. Speaker: I suggest that with new Clause 31 we take new Clause 34—"Liability of charitable donations to pool betting duty"—and new Clause 45—"Pool betting duty—charitable exemption".

Mr. Higgins: New Clause No. 31 is designed to protect the existing position of a number of charities concerning their liability to betting duty on pools which they run for charitable purposes.
Most new Clauses and Amendments on Finance Bills fall into three categories: a point of substance, what is normally described as a probing Amendment, or perhaps a drafting Amendment. New Clause No. 31 has something of the element of all three. It most certainly includes an important point of substance, on which I hope we shall get a sympathetic reply from the Financial Secretary, because it deals with a serious matter concerning a number of large charities in this country.
It is also a probing Amendment, because it seeks to clarify the existing law on the liability of these charities to betting duty.
It is also a drafting Amendment, because we seek to put forward a form of words which will remove any possible doubt about the liability of a charity to betting duty on that part of its contribution which goes directly from the contributor to the charity.
I stress that I am not necessarily wedded to the particular wording of new Clause No. 31. It may be that the wording of new Clause No. 34 or new Clause No. 45 may be preferable. It seemed that this was a matter of such urgency


that we should try a number of different formulations in the hope that the Government would find that one was precisely right and could be accepted as it stands. On Report stage of a Finance Bill, if the wording is not right there is no subsequent occasion in another place where we can get it right. Therefore, we thought it worth while having three attempts at the wording in the hope that one might be acceptable to the Government. I cannot believe that the Financial Secretary, if he is to reply, will not feel able to accept one of these new Clauses.
The purpose of New Clause No. 31 is not to reverse a decision of the House of Lords in a particular case concerning the liability of charities to pools betting duty, a decision which was made at the beginning of July. However, it will be helpful to spend a short time spelling out some of the points involved in that case, because this will bring me to the main point at issue in the new Clause.
The effect of the recent decision of the House of Lords has been severely to reduce the amount of money available to a number of charities—in particular the Spastics Society. Indeed, the sums involved are very large—about £900,000.
The course of this case has been described in various newspaper reports. Essentially what happened was that in the 1964 Act an attempt was made by my hon. Friend the Member for Farnham (Mr. Maurice Macmillan), under the Chancellor of the day, to tighten up the law concerning tax-free pools expenses. The aim was, as far as any shilling stake was concerned, to try to include 7½d. of that stake. Effectively, a number of charities then divided their operations into two separate companies. They felt that in this way they would be able to escape the full impact of the duty on that part of their operations which would normally have been taxable. They still, however, were certain in their minds that the 2d. contribution which the charity received, as against the contribution which went into the pool, would be on perfectly safe ground.
The House of Lords, after a four-year legal battle, has now decided that the pools company operating on behalf of the charity shall be liable for 10d. out of every shilling, as far as the duty is con-

cerned, not merely 2½d. As a result, about £900,000 has been lost.
This is relevant to the point which I wish to make now, in the sense that it clearly is a severe blow against one of the major charities in this country. Not only is it a blow against that charity, where the revenue from its pools operations contribute about half its total income, but it is also a blow against a number of smaller charities which depend for an important part of their revenue on such pools.
National Spastics Week took place the week before last. I, in common with many other hon. Members of this House, attended some of the functions taking place in that week. The general attitude of the voluntary workers organising the events on that occasion to raise sums which, while significant and very good, were small compared with the sum that I have just mentioned, were incredulous that any Government should feel it right to pursue this tax in the way that they have. I make no comment on that, because it is not within the scope of the new Clause. None the less, there is a grave danger that we may discourage voluntary work in this sphere, which is very important.
The point at issue, in the light of the situation that I have just outlined, is that there is now some doubt whether the Spastics Society and the pool which is operated on its behalf and on behalf of other charities will be liable not only to the duty which I have already described but also on the 2d. in the shilling which is an actual donation to the charity itself.
It should be made abundantly clear that this was not the intention of those who tightened up the legislation in this general field in 1964. I want to quote briefly from a letter written by my hon. Friend the Member for Farnham to the former hon. Member for Bristol, North-West. He stated the position very clearly when he said:
This means that of the 1s. paid weekly by entrants only the 2d. donated by them to charity will not be chargeable with duty.
There is now some doubt whether that 2d itself is not in some danger. That is why we felt it right to table this set of new Clauses.
I should explain why some doubt has arisen in this matter. Following the


result of the High Court case the spastics organisation responsible for running the pool received a letter from Her Majesty's Customs and Excise dated 15th May, saying:
I am directed by the Commissioners of Customs and Excise to refer to your letter of 11th March and to acknowledge receipt of your copy of the rules of the Spastics League Club, which are enclosed. I am to inform you that duty is payable on a donation unless a rule can be shown which indicates that it is made voluntarily.
That indicates that the Inland Revenue intends to pursue this matter still further and to take into tax even the donations made to the Spastics Society at the moment.
We felt that the House would not wish to see this happen and in order to put the matter beyond any doubt we have tabled these new Clauses in a spirit of some urgency, because this is an important and considerable matter. If the 2d. in the Is. were to become taxable at the duty of 33⅓ per cent. the sum involved for the spastics would be about £500,000. It would have £500,000 less to spend in doing its work of helping spastics. If the issue were taken back to the 1964 Act the loss that the society would suffer as a result of the point that I have just mentioned would be £2½ million. Again, its work would be inhibited to that extent.
It is not necessary for me to describe in detail the tremendous amount of good work which this charity—like many others affected by this point—carries out. Many hon. Members will have had experience of it in their own constituencies. It is not simply a question of certain groups being affected—for example, spastic children, for whom we have a tremendous amount of sympathy; it is also a question of adult spastics, and especially their employment and training. Here again, the society does a great amount of good work.
The essential point to be made is that neither local authority help nor National Health Service help is adequate to deal with this problem. In many cases the National Health Service does not provide adequate facilities. The Daily Telegraph, in an article published on 12th July, pointed out that the £900,000 loss was likely severely to curtail the training of 6,000 young spastics, and that the loss of £500,000 would probably bring the

spastics' plans to a halt. Yet most local authorities have facilities to train only mildly afflicted spastics. Many of these people are subnormal. Out of the 100,000 spastics probably about 40,000 are subnormal. Of these about half are severely subnormal. Local authorities can seldom make any provision to help them, and the facilities available are simply inadequate.
7.15 p.m.
The Spastic Society carries a burden which neither the National Health Service nor local authorities are carrying. This is a matter of tremendous importance in terms of human happiness. Even now the Spastics Society can help only about 20,000 out of the 100,000 spastics. There is a tremendous need for expansion. For that reason it seems totally wrong that on top of the set-back that has already been caused by the House of Lords' decision the society should feel that there is some danger of its plans virtually being stopped dead in their tracks.
The problem is not simply one of help for children and adults; much research is carried out. About £300,000 has been spent on fundamental research to help spastics. Over 100 social centres for spastics have been provided by the society, which makes it one of our major charities. I do not wish to go into details of these cases; they are sufficiently familiar to the House.
My argument is threefold. First, if this doubt is not cleared up it will severely affect the morale of the voluntary workers, who do a tremendous job. Secondly, there seems no doubt that the 1964 Act, as originally drafted, was not intended to lead to a situation in which the 2d. donation to the charity was taxable. There is no question, in any sense, of the Government's losing revenue; it is simply that they will not get extra revenue that they did not intend to get and did not expect to get, and which I hope the House will feel they should not get.
For those reasons, I hope that the Financial Secretary will find it possible to accept whichever Amendment is best drafted. I find it difficult to imagine that anyone in this House could think of a better use for the money which the Revenue might otherwise acquire than that to which it is already being put by


the society. I hope that the House will feel that one of the new Clauses should be accepted.

Mr. Harold Lever: It may be for the convenience of the House if I rise early in the debate. I am not precluding the comments of other hon. Members. This matter has been widely publicised and even more widely misunderstood. The House of Lords decision was not a decision to tax spastics, or any charity; it was a decision which applied to a commercial firm running pools the appropriate law relating to the pool duty on the operations of that firm in respect of its pool. It had nothing whatever to do with taxing voluntary donations to the Spastics Society or any other charity.
These voluntary donations are not and never have been liable to pool betting duty. I want to make that absolutely plain. Voluntary donations are not, never have been and—as my right hon. Friend the Chancellor prompts me to say —will never be, as far as he is concerned, liable to pool betting duty. Nobody need have the smallest anxiety about that.
What was decided by the House of Lords was simply—as might have been decided in relation to any other commercial promoter of a pool—the appropriate rate of pool betting duty, having regard to the circumstances of the pool operation. The amount decided by the House of Lords would have been the same if I or if you, Mr. Speaker—if one can conceive of your taking time for the running of a pool—had been running the pool in a commercial way. This was the appropriate duty. That was what the House of Lords found. It was a duty payable by the pool promoter, calculated in accordance with the provisions of the Act in precisely the same way as is done for every other pool promoter. It was not a duty on spastics.
It has been said in the Press that as a result of the case the Spastics Society will lose £900,000. We understand that the promoters of the pool had said that if the House of Lords case had gone in its favour it intended to make a contribution of something like £900,000 to the spastics. What that amounts to saying is that if something in the region of £12,500,000 of pool duty had been avoided by the particular operations of this pool, £900,000

would have been given to the Spastics Society.
We cannot, in operating the collection of the pool duty, have regard to what people intend to do if they are fortunate enough to find themselves exempt from pool duty should they carry on operations in a particular way. The respondent, Top Ten Promotions Limited, carried on its operations in a somewhat complicated way, as it was perfectly entitled to do, seeking, and hoping, that the consequence would be that it would be relieved of several millions of pounds of pool betting duty—a very laudable and interesting expectation from its point of view.
On the other hand, from the point of view of the Revenue it was our duty to apply the law to see if we could collect the duty as we would have collected it from any other person. The fact that this company has been disappointed by the House of Lords decision and that its disappointment will be reflected in a lesser donation to the Spastics Society or any other charitable cause, is not a ground on which we could possibly have held our hand in seeking to apply the ordinary rules of pool betting duty. The House must be clear about this. Charity is one thing and pool betting duty is another.
This is not the charity operating a pool. Even if it were, it must pay the full betting duty just as any other pool pays it, otherwise there may not be any pool betting duty. Pools will be run exclusively by charities. If the House wants this it can make a solid and coherent decision to this effect. Someone must table a new Clause exempting charities from duty.

Sir John Foster: We have done so.

Mr. Lever: The hon. and learned Member for Northwich (Sir J. Foster) tells me that there is a new Clause which totally exempts charities from the duty. That must be new Clause 45, which is being discussed with this other new Clause. What has to be done is to exempt all charities and allow them to carry on pools without paying duty, in which case it is only a matter of time before the other pool promoters would be out of business, because they could not compete with a charity wholly exempt from pool betting duty, as the prizes available to the charity would be vastly


larger, and the odds vastly larger than those available to the commercial firms.
We could equally well exempt them not merely from pool betting duty but horserace betting duty so that any charity could conduct a bookmaking business and be exempt from the 5 per cent. duty. There would soon not be any bookmakers left in competition. Once we exempt them, not from the income tax on profits, but from the duty on turnover, there would not be anyone else operating. It may be very desirable in the interests of charity, but it certainly would wipe out the receipts from pool betting duty.
I do not want to labour the point unduly but I do want to make it absolutely clear that the House of Lords decision was not one to tax spastics or any other charity. It was not the decision of the Lords or the Revenue that voluntary donations should be liable to full betting duty or to any duty of any kind. These voluntary donations are not, have not been and will not be liable to duty. Anyone who wants to give money to the Spastics Society voluntarily will have our total encouragement and total exemption from any kind of duty. If they want to give it to any other charity too, so much the better. It has nothing to do with the point which has received publicity. What we are asking the House to say here is that when we have a pool betting duty we cannot have exempt persons operating because very soon there will be no one else left and we will have to abandon the whole duty.

Mr. Higgins: I hope I have made it clear that we were not seeking to over-rule the House of Lords decision in any way. I was merely putting it in that context to emphasise that there was already considerable dispute about this. It would be a very great deal worse if the Inland Revenue, on the basis of the letter I quoted, sought to extend the tax even to the contributions to charities.

Mr. Lever: I did not allege that the hon. Gentleman said anything unfair or inaccurate. There has been a great deal of newspaper and other comment upon this matter and I was very anxious that the House should know the position about voluntary donations. Where there is a simple voluntary donation to charity, it

is not and will not be subject to any form of duty. Voluntary donations to charity and arrangements which appear to give a flavour of voluntary donation to charity but which are not voluntary donations and which result in the avoidance or reduction of pool betting duty, are two different matters. I give in unqualified terms the assurance about voluntary donations to charity.
Purely voluntary donations have been and will remain wholly exempt from pool betting duty or any other duty. I will not go into all the mechanics of this or the House of Lords decision unless there is some interest in my doing so. The House can rest assured that we are applying pool betting duty in the ordinary way, as the House decided. Unless the House feels, against the advice I have given, that we ought to allow charities to operate without any pool betting duty or with a reduced duty, then the House must reject the new Clause.

Mr. Higgins: I am merely trying to save time. The right hon. Gentleman has not taken the central point. Suspicion has arisen that the Inland Revenue intends to tax the 2d. voluntary contribution, and the basis for that is the letter I have quoted. It is now insisting that the duty is payable on the donation unless a rule can be shown which indicates that it is made voluntarily. If there is no such rule it may still be made voluntarily and there is a grave danger that this case may be fought for another four years by the Revenue.

Mr. Lever: I was trying to spare hon Members some of the details. These suggestions are not in accordance with the facts, which are as follows. Around the turn of this year the pools promoters in this case introduced revised rules under which weekly payments went up from 1s. to 1s. 6d. and the charitable contribution was increased to 2·7d. per entrant per week for three weeks out of a four-week cycle. Because of the unusual arrangement it was not clear how a club member could voluntarily make a payment of 2·7d. The position was queried by Customs and this produced, I am sorry to say, an evasive reply from the promoters. As a result the query was repeated.
Some weeks ago a local Customs officer reminded the promoters that the point was still outstanding and since


then a letter has been received from the firm's solicitors. No reply has yet been given to the Customs, but it appears that the voluntary donation has now to be paid, or forgone, together with the club payments, the two together totalling a round number of pence. In these circumstances the voluntary donation will be exempt from duty. No one has to worry his head about what is a genuinely voluntary donation. I do not like to use tendentious language, but if there is no unnecessary complication over the voluntary payment in such a way as to make it clear that it is not a voluntary payment but merely an attempted circumvention of duty, then no problem arises. If someone wants to make a voluntary payment they can do so and it is absolutely free from duty and will remain so. I cannot make it clearer than that.

Mr. Higgins: There is doubt about this matter. Will the right hon. Gentleman accept whichever of the Amendments he feels will meet the situation?

7.30 p.m.

Mr. Lever: I cannot see where the doubt is. I have assured the House that if any purely voluntary payment is made by pool promoters to a charity which is a genuinely voluntary payment to a charity, be it the Spastics Society or any other, in no circumstances will pool duty be collected. What more comprehensive assurance does the hon. Gentleman, or even the hon. and learned Member for Northwich, want?

Sir J. Foster: Would the right hon. Gentleman point out where the word "voluntary" appears in the Statute? The difficulty has arisen because the Customs have introduced the word "voluntary".

Mr. Lever: We have accepted that the donations given in the form now communicated to us are exempt from duty. The only thing which can be taxed is, not payments made to a charity, but payments which are contributions to a football pool in such form as to be liable to pool betting duty. If they are not contributions to a football pool and hence liable to pool betting duty they will not be taxed. If they are contributions to a charity they will not be taxed.
Acceptance of the new Clauses, far from clearing up the matter, would complicate it still further. The present law is perfectly simple. The ruling which I

have given seems to me absolutely clear and need not trouble anybody. A voluntary contribution to charity and not a voluntary contribution to a football pool is not liable to pool betting duty.

Sir J. Foster: The confusion has arisen because of the Financial Secretary's definition of "voluntary". He shied off the question when I asked him where the word "voluntary" appeared in the Statute. He said that anything which was not a contribution to pool betting was voluntary. That may be one way of expressing it, but it makes the whole matter unclear. The Customs say, "If it was not voluntary you must pay". The Statute does not say that. The Customs say, "There must be a rule that this is voluntary." I do not know of charities soliciting donations which say in, perhaps, Rule 82 that contributions must be voluntary.

Mr. Lever: The hon. and learned Gentleman is far too subtle and too intelligent not to have taken my point. Use of the word "voluntary" is another way of saying that they are genuine. One can make contributions which one has to make as part of the pool itself. They are not contributions to charity but are contributions to the pool which one has to make to participate in the pool.

Sir J. Foster: I take the right hon. Gentleman's point, but the way in which he puts it only makes the situation more difficult.
The Customs letter says:
…that the duty is payable on the donation unless a rule can be shown which indicates that it is made voluntarily".
The best rule for showing that it is made voluntarily is that which says that when making a donation the subscriber shall subscribe to a statement on oath before a commissioner for oaths that it is made voluntarily. The letter cannot mean that. Therefore, what does it mean?
The rule then says that in making donations to the club it must be indicated that on no account must the twopence go to the pool betting promoter.

Mr. Lever: What the word "voluntary" means—

Mr. Speaker: I hesitate to intervene. We are on Report, which is rather more formal than Committee. I know that an


attempt is being made to shorten the debate, but the interventions seem to be lengthening it.

Mr. Levers: Perhaps I can shorten the debate by pointing out that what we meant by "voluntary" was in conformity with the wording of the 1964 Act, which refers to benefit so provided by means of payments made for the purpose by persons making bets and are not payments without which bets cannot be made.

Sir J. Foster: That was my next point. The right hon. Gentleman says that the situation must not be complicated by considering whether it is voluntary. I agree that this is a little bit of a tease of the right hon. Gentleman. We want to be clear that when 2d. is sent to the spastics club, although it is sent in the same bundle as the 10d., which goes to the pool promoters, the 2d. goes off that way and the 10d. goes in respect of pool betting. In those circumstances, there is no danger of the twopence being caught. How are people to frame a rule which indicates that a payment is made voluntarily? It is difficult for the Government to say, "Our civil servants made a mistake". If they cannot agree, will they draft a rule about payments not being made voluntarily?
I hope that the Chancellor of the Exchequer will consider the content of new Clause 45 for next year. The Financial Secretary made a very good argument against pools being run by charities, which would exclude all pools. All that new Clause 45 proposes is that when a charity runs a pool it will have to pay betting duty on the amount which goes to the people who win the prizes, but that the part which goes to the charity will not be taxed. We would not press the point this year because it involves a new principle.
I should like to deal with the point about 40 per cent. of spastics being subnormal. There is a wonderful documentary film sponsored by the Government which shows spastics during their ordinary lives. The mistake which many people make is to assume that, because a spastic talks with a distorted face and has great difficulty in expressing himself, he is mentally retarded. The point of the film, produced by an organisation called, I think, Samaritan Films, which I hope

many hon. Members will see, because it is very heartrending, is to depict the lives of two or three spastics. It lasts for about 35 minutes. It shows them speaking normally. That only reinforces the need there is for a great deal of money to be spent on these people quite outside the National Health Service.
Coming back to the main point, I think that the right hon. Gentleman and we on this side are agreed that the 2d. will not be taxed. We—that is, the Spastics Society—were frightened by this letter from the Customs and Excise that we might have another case going to the House of Lords where it would be argued that the 2d. went in with the 10d.

Mr. Robert Cooke: I am not entirely happy with what the Financial Secretary has said. It appears that because the past rules of the pool did not comply with what has just been laid down, the Customs and Excise is trying to claw back duty on the 2d. The right hon. Gentleman shakes his head. I only hope that that is true, and—

Mr. Alexander W. Lyon: He has said it.

Mr. Cooke: With respect, he has not said it. He has said that it will be all right in the future provided that the rule is all right, but it is the past with which we are concerned—

Mr. Harold Lever: I have said this more than once, but it does not seem to have got home to hon. Members opposite or to the hon. Member for Bristol, West (Mr. Robert Cooke). I have said that the 2d. is no longer in question. The hon. and learned Member for Northwich (Sir J. Foster) has my point. This has been accepted as being free from any pool betting duty.

Mr. Cooke: I hope that the right hon. Gentleman's statement means that the 2d. subscribed in the past are all right, because it is about those that we are concerned. It is no good the right hon. Gentleman looking entirely surprised—the whole thing has been quite confusing from the very beginning of the discussion.
We are happy to know that if the rule is written in the way suggested by the right hon. Gentleman things will be all right in the future, but, as I see it, in the light of the letter which was read


out by my hon. and learned Friend the Member for Northwich (Sir J. Foster), there was a chance that the Customs and Excise would try to claw back duty on the 2d. proportion of the money being sent to the pool. We may have to return to this matter again at the earliest opportunity if we find that the Customs and Excise, in pursuing, as the Revenue pursued in the past, the duty on that part of the subscription which is a straight contribution to the pool, is also going after this 2d. contribution designed to help the spastics. I am still not happy about that, and I am not at all sure that my hon. Friends are happy about it either.
I got the impression from what the right hon. Gentleman said that in order to be absolutely in the clear there had to be a rule which said, "You can enter a 1s. stake in the pool, and 2d. will go to the spastics, but if you like you like you need send only 10d. and provide nothing for the spastics at all." It would seem that the right hon. Gentleman by that rule envisages a right to contract out. People did not seem to realise that they had a chance to contract out in the past, and I hope that it will not occur now. I am not the only person who does not understand this rule: some of my hon. Friends also seem still to be worried about it. Our only hope that things will be all right. If they are not, we shall have to return to this matter at the earliest opportunity.

Sir Brandon Rhys-Williams: If the Financial Secretary had any idea how much this means to some of the most helpless people in the world, he would not equivocate to the House as he is now doing. I have here the letter of 15th May from the Customs and Excise to Regional Pool Promotions Ltd. It reads:
In reply to your letter of 7th March, I am directed by the Commissioners of Customs and Excise to inform you that duty is payable on the donation unless you and Regional Club Organisation Ltd., or either of the two companies can point to a rule which indicates that it is made voluntarily.
It is difficult for these people to do any such thing.
If the matter is brought to the courts, the Spastics Society, for whom I had the honour to work some years ago, is satisfied that it can produce an adequate defence, but it has just had the ex-

pense and anxiety of several years of litigation, and it fears that it may have to face a further action of this kind. Will the Financial Secretary say categorically that that letter was written under a misunderstanding, or will he clarify the point now at issue by accepting one of our three variants, any of which would make the matter quite clear?
I recommend new Clause No. 34, because it would make it plain that whether or not the Customs and Excise is right in reading this Section in the 1964 Finance Act as it has done, Parliament does not wish this vendetta against the spastics to be pursued any further. I therefore ask him to give us a decision.
The reason for our doubt is the emphasis which the right hon. Gentleman placed again and again on the word "voluntary". I am certain that the 4 million people who take part in the, pool know very well that the money which is intended for the spastics goes to the spastics; and no doubt they join the pool because they are happy that the money should go to the spastics. They will be extremely concerned if this point is pressed home, and £½ million a year, plus, perhaps, £½ million retrospectively, is taken by the Treasury. I repeat, the Financial Secretary would not equivocate if he had any idea of what this means to some of the most helpless people in the world.

7.45 p.m.

Mr. Maurice Macmillan: Perhaps I can clear the ground a little by saying that I accept what the Financial Secretary has said about what happened in the past in the light of the House of Lords decision. I fully accept also that it was the intention that the whole contribution made to charity in the course of pool betting by the public should not be subject to pool betting duty, That being so, I find it difficult to appreciate why the right hon. Gentleman will not accept our new Clause. It seems to me that the terms of the Act as it now stands could well be construed to mean that had the Customs and Excise proceeded with its case it could well have won it.
The Financial Secretary made great play with the word "voluntary". So did the Customs and Excise in writing to the Spastics Society. But in no part of the Finance Act, 1964, nor in the letter


which, in a different capacity, I wrote about the Act, did the question of voluntary contribution come in. It is quite clear from the letter of 9th June, 1964, that the intention was that the whole contribution which went to the charity should be exempted from duty, and nothing else. We accept that.
The right hon. Gentleman has said that the only way in which one can identify the meaning of the words in the Act about payments made for the purpose of charity by persons making bets was to say that the sums must be defined in the rules of any charitable society as being voluntary payments. Can the right hon. Gentleman reassure the House that the Spastics Society will not have to pay any more duty in respect of these contributions? Here we are not concerned only with the spastics. Does this rule mean that all such contributions are safe? In the course of his argument, the Financial Secretary said that the Customs and Excise had found it hard to believe that any contribution of 2·7d. was charity. It seemed that the argument turned on whether they were the sort of people who would decide in advance to give to the Society.
We must be certain that when any person takes part in this type of pool betting, where there is a defined prior undertaking that a proportion of the total amount sent each week by an individual goes to a charity, that proportion is deemed to be a voluntary contribution. What makes it voluntary is the knowledge of the society and the promoters and the person contributing beforehand that some proportion of that total stake is irrevocably and irretrievably going to the charity concerned. If that is what the Financial Secretary means, we can be happy about it, but if it means that the burden of proof of a voluntary intent is on either the society or the individual, we are not happy about it.
My limited experience of Customs and Excise is that the Department is properly reluctant to impose any form of taxation of motive. If it can be said that in this case any bet which goes irrevocably each week would have a proportion of the total, which may be 2·63d., laid down beforehand and there is no escaping that it is deemed to be a voluntary contribution, I cannot see why the Financial Sec-

retary cannot accept one of these new Clauses. Will he also say that he will look into the question of whether the actual working of the proviso in Section 7(2) of the 1964 Act cannot be taken in any other way? It is not a question of whether he wants to take it another way or of the Economic Secretary wanting to take it in another way, but whether it can be taken in another way. Can he make certain that that is the only way in which it can be interpreted?

Mr. Harold Lever: May I, with the leave of the House, make a last attempt to clear up points which have troubled hon. Members. On the question of voluntary payment, this is the Customs way of trying to use popular language to differentiate between payment made by persons making bets which are not payments without which the bets cannot be made. The Customs are trying to implement the Act. It is not irrevocability which determines it, but the wording of Section 7(2). I shall certainly give some thought to seeing if we can put it in popular language so that there is no misunderstanding.
The hon. Member for Bristol, West (Mr. Robert Cooke) thought that I was equivocating, but I thought I had made it clear and there was certainly not any equivocation. It may have been stupidity or obtuse language of mine, but I want the House clearly to understand that there is no question whatever, and never has been, over Spastic Society contributions in the past years—[Interruption.] The hon. Member for Kensington, South (Sir B. Rhys Williams) is waving letters at me. I do not think they are letters addressed to the Spastics Society but to the Top Ten Promoters. The Spastics Society over the years has had a number of contributions. There is some suggestion that we are claiming duty and, what is more, backdated duty, but that is out of the question. There is no question of that, and never has been.
The hon. Member for Kensington, South must stop waving something at me which I cannot read from this distance. No doubt it has a potent force on his emotions, but it cannot have force on my intellect because I cannot read it at this distance. There is no question, and never has been, of a back-dated decision requiring £2½ million or so from the Spastics Society in respect of past donations. If


that is not clear, I do not know what can be clear. We do not claim, and have not claimed, anything in respect of the payments, 2·7d. or not.
Customs and Excise thought it rather an odd fragmented sum to qualify within the Section 7(2) provision and went into the question. The Department has since discovered that this is perfectly all right and entirely within the Section 7(2) provision and no question of duty arises on it at all. As to the past, I assert that there never has been a problem, and there will not be a problem. The Customs and Excise are now completely satisfied that these contributions are volunary, that is, they conform to Section 7(2). We need net quibble about what "voluntary" means. The Customs are completely satisfied that they conform with Section 7(2) of the Act and hence are completely free from any question of pool betting duty.
If any hon. Member still thinks there is cause for anxiety—[HON. MEMBERS: "Yes."] I cannot waste more time of the House repeating that neither the past contributions nor the present ones are to be subjected to full betting duty.

Mr. Higgins: Will the right hon. Gentleman reassure us on one particular point? Is he saying that there is no liability whether or not the society is concerned as there is no rule showing that the matter is voluntary? That is the point in the letter from the Customs and Excise which is causing anxiety.

Mr. Lever: This has nothing to do with the rules of the society but is simply a question of the basis on which the payments are made. Do they conform to Section 7(2) or not? These do, we have now decided. The hon. Member and other hon. Members appear to believe that this litigation has been between the Customs and the Spastics Society, but that is absolute nonsense. It has been between the Customs and commercial pool promoters. There is no litigation of any kind between the Customs and the Spastics Society, and I certainly hope there will not be.

Mr. Higgins: The letter was written to the Regional Pool Promotions Limited and said:
I am directed… to inform you that duty is payable on the donation unless you and Regional Club Organisation Limited or either of the two companies, can point to a

rule which indicates that it is made voluntarily.
Does the right hon. Gentleman say that it was a mistake to write that letter?

Mr. Lever: No. This is not a rule of the Spastics Society but as part of the commercial group. That letter was written to that part of the promoters' commercial group. What we wanted to know was that the donations were collected in the manner statutorily provided. We used the word "voluntarily" and satisfied ourselves not that the Spastics Society but this commercial promotion company has collected the money in terms which comply with Section 7(2). That being the case, the payments are and will remain completely free from pool betting duty.

Mr. Geoffrey Hirst: I have great respect for the Financial Secretary and I know that he is trying to help the House, but I believe that the Society will suffer. If the burden of proof is so plain and the society could not point to the fact that there is a rule to get it out of difficulty, technically whether it is pursued or not begs the question and according to the letter the proportion which the society gets will become taxable.
There are only two ways in which the right hon. Gentleman can get the House out of its difficulty. He could either accept one of the new Clauses which would put the matter right, or he could say that the Customs and Excise wrote that letter in error.

Mr. Harold Lever: indicated dissent.

Mr. Hirst: The House cannot trust the validity of the right hon. Gentleman's argument. He has been in this House for a long time, and so haw I. He knows that Treasury interpretations mean absolutely nothing. They do not impress me in the slightest. I have heard many in my time which did not mean a thing. The right hon. Gentleman has responsibility for the Board of Customs and Excise. It cannot interpret the law; that is for the courts to do. If the Customs and Excise were wrong or there is no purpose—

Mr. Harold Lever: rose—

Mr. Hirst: No, I will continue what I wish to say. The right hon. Gentleman cannot expect the House to accept that


this argument will put at rest the minds of societies in the future. He has done nothing to assure the House in consequence.

Question put and negatived.

Schedule 1

SPIRITS (RATES OF CUSTOMS AND EXCISE DUTIES)

8.0 p.m.

Mr. Nigel Fisher: I beg to move Amendment No. 89, in page 73, line 30, at end insert:
Importation of aromatic bitters shall be exempt from spirit duties. For the purposes of this Schedule, 'aromatic bitters' means bitters, aromatic, containing 44 to 49 per cent. alcohol, and 1·5 to 6 per cent. by weight of gentian, spices and other ingredients, 4 to 10 per cent. by weight of sugar, and packed in containers of capacity less or equal to 0·5 litres.
I am sorry that the hon. Member for Birmingham, Northfield (Mr. Chapman) is not in his place, because I am sure that he would have moved the Amendment much more persuasively than I shall be able to. By comparison with other Amendments to this Bill, this may appear to be a relatively small matter, but it is important to Trinidad and Tobago and it has the support of hon. Members on both sides who know the West Indies, and Trinidad in particular. Some of us have been pressing the substance of the Amendment on successive Financial Secretaries, of Conservative as well as Labour Governments, for many years. I think I first began to argue the case at least 10 years ago, although this is the first opportunity the House has had of debating the matter.
The comparative prosperity by West Indian standards, of Trinidad and Tobago has in the past been based mainly upon oil, but that is now a declining industry. Unemployment in that country is increasing. I believe that 15 per cent. of the total work force is unemployed, including no less than 30 per cent. in the 16–20 age group. There is also quite a serious balance of payments problem in Trinidad.
So the export importance of Angostura bitters to the country is quite considerable, yet this export cannot be increased in volume as long as Angostura is classified as a spirit to drink, because the consequential high import duty makes it

too expensive for what it really is, which in truth is only a flavouring. Angostura bitters cannot be drunk neat—it is a most disgusting taste. It can be used only for flavouring other drinks or dishes. If it was classified as a flavouring, it would be useful and popular to flavour puddings and cakes as well as to flavour gin. It would be quite a boon to the British housewife, and I believe that consumption would greatly increase. It is almost certain that, because of that, the Exchequer would get as much revenue from the larger quantity imported as it now gets from the larger duty on the small quantity imported. In any case, the loss, if any, to the Revenue would be virtually negligible.
A large number of countries have already reclassified Angostura as a flavouring. In the last few years Grenada, Guyana, Jamaica and Peru have all reclassified it. Australia did so seven years ago. Canada did so over 20 years ago. In the United States it has been taxed only as a flavouring for over 50 years, including during the period of prohibition.
I believe that by 1972 we shall be the only major country in Western Europe which still classifies Angostura as an alcoholic beverage, which it is not; unless the Government take the opportunity afforded by this Amendment to correct this obvious anomaly which Great Britain is becoming almost unique in persisting with. I hope very much that my right hon. Friend will take this opportunity tonight. He has, with his usual courtesy, seen the hon. Member for Northfield and myself to discuss it and I know that he has sympathetically considered the matter in his Department. If he cannot give us this concession this year, although I do not think it would cost the Treasury much revenue, I hope that he will at least give me an assurance that he will consider it favourably if he is in the same Government position next year.

Mr. Harold Lever: I considered this matter very carefully with the hon. Gentleman. This is a problem of the structure of the duty in Britain. It is not a barrier that the hon. Gentleman can lightly get over in his research for treatment of Angostura as being a non-dutiable spice, as it were, or flavouring.

Mr. Fisher: That is what it really is.

Mr. Lever: The hon. Gentleman says that what it really is is a flavour or taste. What the Customs says is that what it really is is a spirituous liquor. It can be both things. I think that it is a flavour. I think that it is a spirituous liquor. What the hon. Gentleman is so keen to emphasise is its flavour character and not its spirituous character. The Customs in its dour way seeks to emphasise the spirituous character.
I do not want to raise any false hopes about this, because there is a structural problem. The hon. Gentleman has made his case with earnestness and with force. I promise once again that we will have the matter under consideration and give it a genuine new look in the hope that we can find some conceivable opening, but I do not want to raise any false hopes. I do not want the hon. Gentleman

5
4A.—(1) Where a betting premises licence is granted so as to have effect from the beginning of the licence-year or from a date in that year not later than the end of February, and section 237 of the Customs and Excise Act 1952 does not apply for the reduction of the duty payable on the licence, the licence may at the option of the person liable for the duty be granted on payment of only half of the full duty; and in that case the second half shall be paid not later than the following 1st March.


(2) If default is made in payment of the second half of the duty, the licence shall be of no effect so long as the default continues.


(3) If after 1st March any sum remains unpaid in respect of the second half of the duty, that sum may be recovered as a debt due to the Crown.


10

Mr. Deputy Speaker (Mr. Sydney Irving): With this Amendment we may discuss the sub-Amendments:
(a) In line 2, after 'a' insert 'later'.
(b) In line 2, leave out:
'not later than the end of February'.

(c) in line 4, leave out 'the licence may' and insert 'the duty may.'
(d) in line 5, leave out from 'be ',to end of line 6 and insert:
'paid, in any case where the licence is to have effect from the beginning of the licence-year, in twelve equal monthly instalments, and in any other case by such number of equal monthly instalments as corresponds to the duration of the licence, and in any such case the licence shall be granted on payment of the first of such instalments'.
(i) in line 5, leave out from' be 'to end of line 6 and insert:
'paid, in any case where the licence is to have effect from the beginning of the licence-year, in twelve equal monthly instalments, and in any other case by such number of equal monthly instalments as corresponds to the duration of the licence, such instalments being in either case payable by means of the Post Office Giro, and in any such case the licence shall be granted on payment of the first of such instalments'.

to think that this is in the nature of any kind of commitment. I cannot give him one. I am glad that he has raised the matter again briefly. I promise to look at it again, without commitment.

Mr. Fisher: In view of the right hon. Gentleman's gracious reply, even though it does not constitute a firm and definite undertaking, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Schedule 8

PROVISIONS RELATING TO BETTING PREMISES LICENCES AND DUTY THEREON

Mr. Harold Lever: I beg to move Amendment No. 90, in page 81, line 32, at end insert:

(e)in line 5, leave out:
'half of the full duty; and in that case the second half shall'
and insert:
'twelve equal monthly instalments to'.

(y) In line 6, leave out '1st' and insert '15th'.
(e) in line 7, leave out
'the second half of the duty'
and insert 'any such instalment'.
(f) in line 7, leave out second half of'.
(g) in line 9, leave out from beginning to may' in line 10 and insert:
' and the balance of the duty'.

Amendment No. 91, in page 82, line 7, leave out from 'betting' to end of line 15 and insert:
then, subject to and in accordance with the following provisions, the holder of the licence shall be entitled to a partial repayment of duty.

(2) If at the time of the surrender of the licence the whole of the duty has been paid, the repayment under this paragraph shall be—

(a) three-quarters of the duty paid, if the licence is surrendered before 1st January;


(b) one-half of the duty paid, if the licence is surrendered on or after 1st January and before 1st April; and
(c) one-quarter of the duty paid, if the licence is surrendered on or after 1st April.
(3) lf, by virtue of the exercise of the option under paragraph 4A of this Schedule, only half of the full duty on the licence was paid at the time of the grant, and the second half has not been paid, there shall be no payment under this paragraph unless the licence is surrendered before 1st January, and the repayment shall then be one-half of that which has been paid.

Mr. Lever: As the Bill stands, the full amount of betting premises licence duty must be paid when the licence is taken out—that is, normally on or before 1st October. The Amendment provides that a person taking out the normal full year licence before the end of February has the option of paying it either in one sum or in two instalments of which the first will be due not later than the day on which the licence becomes effective and the second not later than 1st March.
Amendment No. 91 makes the necessary consequential alterations in the present provisions for repaying licence duty on discontinuance.
Sub-Amendment (e) tabled by the hon. Member for the Isle of Thanet (Mr. Rees-Davies) seeks to make the duty payable by 12 equal monthly instalments. It is defective in achieving that end, but that is not the point. We feel that we cannot undertake the administrative additional expense of breaking down these payments into smaller sums, much as I would like to have assisted the bookmakers in meeting the extra charge. I have gone as far as I possibly could to help them by giving them a considerable extension of credit compared with the original situation. It was only with very genuine regret that I concluded that I could not, for reasons of technical administrative difficulty, break down the instalments into smaller sums. It was not for lack of willingness to help. It was simply that the administrative inconvenience of it overcame me.
For these reasons, I recommend the acceptance of the Government's Amendments.

Mr. Rees-Davies: I cannot accept that reply to my Amendment. The administrative inconvenience will be no more and no less than that which is already

accepted and surmounted by all local authorities.
There are two matters of considerable importance here, and the Treasury has, I believe, totally overlooked one of them. I believe that I am right in saying that there is no precedent in any Finance Act or analogous statute under which one takes a poll tax before the person begins to trade. I challenge the Government to produce a precedent for that type of taxation.
Let us assume that I take up a licence as a bookmaker. It is proposed that I should pay to the Government three times the rateable value of the premises before I begin to trade. This is grossly inequitable. There is no question of giving credit. Credit has not arisen. I have not begun to develop the trade in respect of which the tax is to be paid. That is the first point.
There are 16,000 betting shops in this country and 2,000 S.P. outlets, largely by telephone, making a total of 18,000. In 1966, the Government introduced a betting tax of 2½ per cent. In 1968, they doubled it to 5 per cent. This year, seeking to draw a differential, they have imposed a further tax, a tax on earnings and intended to be such, of 1 per cent. levied by a different method. It is intended to take this tax from the trading profits of the bookmakers themselves. Instead of being a tax on the punter, a betting tax, it is a direct tax upon the trader himself. Before he begins to trade, and despite the Government's Amendment, he is asked to pay up a substantial sum of money. I know of no precedent for behaviour of that kind by this or any previous Government. It involves collecting in advance £7 million from the bookmakers. As a result of the Amendment, it involves their paying in the month of February, before the season begins, half that sum, that is, £3½ million, and the other half—I do not quite understand the difference between 5 and 7 months—at a somewhat later date.
The question of rateable values and the practice in collection of rates is of direct relevance here. It has been the policy of the Labour Party and the Labour Government, both in opposition and in Government, to give people the right to pay by monthly instalments what they are called upon to pay in respect of rateable premises. We are asking no


more for the bookmaker than we ask for the householder, that he shall pay pari passu on the same system, paying by instalments what is demanded of him, in this case three times the rateable value. Such a system is of even more importance when many of the people concerned have small capital resources and are able to pay only out of their profits and earnings month by month.
An undertaking was given in Committee that the question would be sympathetically considered. It is no answer to say that the Treasury is unable to do what every local authority is well able to do. There is no reason why a licence should not be taken out for a betting office, the bookmaker being able to pay one month's tax. If he does not pay, his licence is automatically revoked. I do not accept the excuse which has been given, and I do not believe that it is true. I know that it is not. The real reason behind it is the fear that the bookmaker may somehow not meet his obligations. But there is a complete deterrent, namely, cancellation of his licence.
8.15 p.m.
Furthermore, this method of taxation is no longer valid. The trend is away from it. As regards bingo, the Chancellor is on record as saying that it is inequitable to continue dealing with it by reference to rateable value of premises since that does not relate to the volume of gaming. Therefore, the Treasury cannot argue this on principle. The principle is now eroded. We are moving into a system under which the tax is calculated according to turnover and the volume of gaming, and there is no case for saying that we should continue to do it by reference to the premises. The House must direct its attention in considering this question to turnover, to the mark-up of profit.
The reason is plain, and I can give examples which illustrate the point in startling fashion. The Treasury will at least recognise that it is wholly wrong—I always thought that the party opposite took this view, though it does not seem to do so nowadays—to levy on the big company a much smaller amount of tax than is levied on the small trader. But in this case the reverse is true, and I have figures to show how it works which even this Government, with their somewhat jaded palate, must appreciate.
Ladbrokes has premises with a rateable value of £24,000 and a turnover of £20 million. It will pay in tax by reference to rateable value of only 0·12 per cent. of turnover. On the other hand, a bookmaker at 75 Market Street, Crewe, will carry a tax of £4,791 on a weekly turnover of £1,000 because the rateable value is £1,597. Thus, a small operator working a betting office in Market Street, Crewe, has to pay 4 per cent. in taxation by reference to the premises which he holds. A man fortunate enough to be in premises at 51–2 Castle Street, Canterbury, however, with a weekly turnover of £3,500—over three times more than the man in Crewe—but with a rateable value of only £138 will pay in tax a mere £414, or less than 1 per cent.
I could cite over 100 examples taken from different parts of the country, but I do not do so because it would bore the House. I am ready to supply figures to the Treasury showing that the percentage variation in tax paid by different betting offices goes from a mere one-tenth of 1 per cent. for Ladbrokes to over 4 per cent. for a bookmaker who happens to have chosen premises in a good area where the rateable value is high.
What is the effect? First, there is a clear discrimination between the credit bookmaker and the man in a betting shop. The credit bookmaker who works on S.P. and operates through the telephone will pay a relatively small amount of tax because he does not need premises with a high rateable value. Very often, he needs only a couple of offices on an upstairs floor. Those who have premises in new, influential and expensive shopping areas, on the other hand, where the rateable value is high, pay a large amount of tax.
The effect is that all who remain in business will wish to move to dingy shops in back street areas, where the tax they must pay will be negligible. Those with six or seven different premises will close those in the areas of high rateable value and retain those in dingy, smaller areas with a far lower rateable value.
But the position is worse, because where they have five or six premises they are unable to carry the payment of 1s. in the pound that the Government have now decreed, when the very small bookmaker is expected to carry on top of that a substantial additional amount of money, which in many cases seems to


average from £1,500 to £5,000. This is a crippling burden. The bookmakers whom one has seen in different parts of the country recognise that they will not be able to meet this obligation. The Government's policy means that those like Hills and Ladbrokes who are in a substantial way of business will be able to pick up at virtually nominal rates small betting offices in different parts of the country.
The policy that was accepted by the party opposite when it was introduced by the Government's Conservative predecessors was that we were to give preference to the small local bookmaker, protect the small man and give him the right to practise his trade because of his community interest. This tax, and the way in which it is inequitably fixed, will result in the reversal of that policy. It will mean that the small man will not be able to continue in business, and the big combines will be able to take over. That will be the end of the very principle for which we fought. It will mean that the building up of the individual bookmaker into a respectable status, giving him the chance to grow up and become comparable to the local publican, will be gone. Some of those who are much aggrieved by the Government's policy will unfortunately revert to what they were before.
Let us not forget who many of the small bookmakers were who had their preference when they applied for betting office licences. I see an hon. Gentleman opposite who has a considerable knowledge, as a justice of the peace, of granting licences of this kind in a large area of London, and he will recognise that what I say is true. In the East End and the City, for example, many licences have been granted to men who were street bookmakers. They came forward and set up businesses which have been properly and carefully look at by the local justices, and they have been very successful. They are continuing in business, but the tax will hit them severely, and those that remain in business will undoubtedly group their businesses, and give up some of their licences—

Mr. Deputy Speaker (Mr. Sydney Irving): Order. I have given the hon. Gentleman fair scope, but he is not really relating his remarks to the Amendments,

which are primarily concerned with payment by instalments.

Mr. Rees-Davies: With respect, Mr. Deputy Speaker, I am. What I am saying is that if one seeks to impose a burden of this kind, where one person is paying a tax of 3 or 4 per cent. on his business and another is paying a mere one-tenth of 1 per cent., it is absolutely essential to enable the small bookmaker, who may be carrying a tax burden of as much as 3 or 4 per cent. on his business, at least to obtain the earnings first. However administratively inconvenient it may be, if it be so, it is essential that he be given the opportunity of paying the tax month by month.
I do not believe that this is one of the matters which have received the attention of the Financial Secretary to the degree that other matters have. I would have been happier if the Chancellor had thought of giving the matter his attention. We have never yet seen him during the passage of the Bill. We never saw him on Second Reading, he was never seen in Standing Committee, and he was seen yesterday only to report Progress at 11 p.m. Today, he never came in even to listen to the main debate.
Therefore, we have a unique situation. We have the unique precedent of collecting a tax before anyone has the chance to earn the money to pay it, and the arguments relating to such a precedent are never heard by an absent Chancellor, who treats the House with contempt and is not prepared to listen to an argument of any kind.

Mr. Alexander W. Lyon: rose—

Mr. Rees-Davies: I shall give way in a moment. The Chancellor, who is an utter disgrace, imposes on the Financial Secretary such a burden as almost to cost him his health, and cannot be bothered to come and listen.

Mr. Lyon: I hope that having had the courtesy to give way the hon. Gentleman will have the equal courtesy to eat his words. My right hon. Friend the Chancellor was sitting here through most of the preceding debate, when the hon. Gentleman was out of the Chamber. I hope that he will now retract.

Mr. Rees-Davies: On the contrary. I am delighted that the Chancellor's P.P.S.


should seek to defend him. I was here through the whole of the debate until about half an hour ago. The Chancellor was not here yesterday, on Second Reading or in Standing Committee. He did not listen to the general spread of the bookmaking argument before, and he has not listened to it now. It is about time he did a little work instead of putting it on his loyal and capable servant to such a degree as to cause a breakdown in other people's health. I very much hope that we shall have him here later, and that he will be given notice before the next series of Amendments, which will also be of the greatest importance to other industries.

Mr. Arthur Lewis: I support the remarks of the hon. Member for the Isle of Thanet (Mr. Rees-Davies) on the Amendment, but not his comments about the attendance of my right hon. Friend the Chancellor. With great respect to him and my right hon. Friend, I would rather have my right hon. Friend the Financial Secretary here than the Chancellor, because I think that he understands more about this subject and is more liable to be understanding. I am not concerned with whether or not the Chancellor is here.
The hon. Gentleman is to be congratulated in the case he has made. As I said earlier, I have always been in favour of fair and equitable taxation on betting, gambling and gaming. But the tax with which we are now concerned is completely unfair on a section of taxpayers. We are singling out a section of the business world who happen to be bookmakers and contribute large sums to the Treasury and are saying to them, "You shall pay three times the rateable value of the premises you occupy before you have done any business. Before you have any money you will have to pay that sum. "This is in advance of knowing whether they will actually earn the amount. The hon. Gentleman was also right in challenging my hon. Friend to say whether any other section of the population is so taxed.
8.30 p.m.
I believe that I heard someone—if it was not my hon. Friend it was another of the little group in that corner—saying that other licences are paid in advance, and that is true. I pay my dog licence any my radio and television licence in

advance. But the payment of 7s. 6d. for a dog licence and £6 for the pleasure of watching my television is rather different, both in principle and amount, from charging three times the rateable value on a tax basis. Yet that is what is happening here.
My sub-Amendment would not only give these people the chance to pay by monthly instalments, but provide my hon. Friend with the ways and means of doing it, thereby obviating his claim that it is not practicable. It would help the Post Office in the process of encouraging the build-up of its giro system.
The Postmaster-General says that the giro system is in difficulties since it is not getting enough business. If the bookmakers could pay by monthly instalments into a giro account, the giro system, which is computerised, could keep all the records for the Treasury and the Inland Revenue and there would be no need to worry. The giro system could tell the Treasury from day to day whether the bookmakers had paid their monthly instalments on the due date. There would be no extra cost to the Treasury or to the bookmaker and no difficulty with regard to taking on more civil servants. There would also be a helpful income to the giro system.
The solution is quite simple. My right hon. Friend would be blessed by the Postmaster-General for helping to increase the revenue and services of the giro system—and let us not forget the free advertisement which the giro system would receive. No doubt William Hill would say, "We pay our licence to Giro No. X." I cannot see how any heavy expense or difficulty would be involved.
The Chamber is almost empty. Few hon. Members are here. Bookmakers are not the most lovable people and not many are willing to speak for them. But this can be a dangerous precedent. I wonder what would happen if the Chancellor were suggesting that we should charge the surtax-payer three times his estimated surtax in advance. One can imagine that the House would be full of surtax-payers. The same would be the case if other forms of taxation were to be levied on the basis of payment in advance of receipt. This is what is happening here and about £7 million is involved, although £7 million may not


seem much to the Chancellor of the Exchequer with his large Budget.
There are more betting shops in my constituency than in any other constituence, according to the official records. Most of them are small betting shops and they will have to pay, pro rata, more tax than the large establishments like William Hill, Ladbrokes and so on, in some cases four or five times as much. Can the Financial Secretary honestly say that the system will be fair and equitable? Is it fair that these people should pay in advance three times the rateable value of their premises with no opportunity of paying by instalments? Next door to the betting shop will be the shopkeeper who has to pay tax on the goods he sells, but he can pay the rates on his premises by monthly instalments. Yet the betting shop next door will not be able to pay by monthly instalments a tax which is based upon the same rateable value. The bookmaker will be able to pay the rates on his premises on a monthly basis by giro, but he will not be allowed to make payments through the giro for this tax. Why? What is the difference? What prevents the Chancellor from accepting this suggestion?
The Financial Secretary has said that there are difficulties and obstacles, but he did not deal with this suggestion, which would be helpful to him, the Inland Revenue, the Post Office and the bookmakers.
I issue a warning. Once this system starts what is to stop a system of taxation in advance being imposed upon us all? There will be nothing to stop the Treasury from imposing a system of taxation in anticipation of what may be earned.
Surtax is paid in arrears. But we are not asking that this tax should be paid in arrears or on the dot. We are asking that they should be allowed to pay by monthly instalments as the tax becomes due.
It would be helpful to the Chancellor if he were to initiate this system. He would have a ready-made book-keeping system which would keep him up to date as to who had paid and who had not. He would then be able to keep an account of what was coming in.
I should like to pay tribute to the giro system, which is a marvellous inno-

vation, well-organised and efficient. The trouble is that it does not get enough publicity and not enough people are using it who should use it. The Treasury could encourage use of the system by giving bookmakers the opportunity to pay this tax through the giro. The Treasury could say to the bookmakers, "You may pay the tax through the giro by monthly instalments which will mean that you will not have to pay 12 months in advance". I do not know about the economics of the matter, but such a procedure might help to offset some of the losses which might be incurred by the giro system.
I ask the Treasury to give careful and serious consideration to this matter. If this suggestion is not taken up now, I prophesy that it will very likely be adopted in some future Budget to get in revenue rather than by the use of other tax methods which the Treasury are so clever in inventing from time to time.

Sir E. Bullus: I should like to associate myself with the powerful case made by my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davis) and by the hon. Gentleman the Member for West Ham, North (Mr. Arthur Lewis). I have been in communication with the Financial Secretary on this matter, and I hope that he will not mind my quoting from one of his courteous letters. He said in the letter:
The possibility of the licence duty being paid by instalments was discussed in the Standing Committee on the Finance Bill on 11th June, and I then undertook to consider the question of the time factor for payment before Report stage of the Bill. I know that you will not expect me to say more at present.
I did not expect him to say more at that time, but I hope that he will be able to say something more today.
I am not a betting man and I never thought that I should be standing up in Parliament defending the bookmakers, but they fulfil a demand in our society. They have a case, they pay their taxes, and they are the constituents of many hon. Members. I have been interviewed by members of the North-West London and Middlesex Bookmakers' Association Limited, and I have learned something about the art of betting and also about some of the difficulties that face bookmakers today.
They were at great pains to point out the effect of this rateable value tax on some smaller bookmakers. They produced a list, with which I have no reason to disagree, showing that some of the larger bookmakers will not be unduly hit by the tax, although the representations of the big bookmakers said that they rather resented paying this additional tax.
The Secretary of the Association gave me a list, taken at random, showing how the tax would be likely to hit some of the bookmakers in the Middlesex area. The weekly turnover in a case in Green-ford was £4,500; the weekly betting duty, £245; the rateable value duty, £13; and the increase in tax, 5 per cent., which might appear to be reasonable.
The right hon. Gentleman said later in his letter:
I appreciate that the new duty may not necessarily be borne by betting businessmen in proportion to their turnover, but it is not pitched at such a level as to impose an unfair burden on bookmakers or their clients.
After listening to the deputation, I came to the conclusion that I could not agree with that last sentence.
8.45 p.m.
Among other cases pointed out to me, there was one at Ruislip where the weekly turnover was £385, the weekly betting duty was £19, the rateable value duty was £18 and the increase in tax 95 per cent. In another case at Southall, the increase in tax was 78 per cent. In yet another case at Edgware, it was 48 per cent. These represent considerable burdens on the-smaller bookmaker, and some of them may be put out of business, in which case the Treasury will lose the tax al together.
I hope that, at some time in the near future, the Financial Secretary will be able to give some help to small bookmakers who may otherwise be driven out of business. It could have far-reaching effects. If the small bookmaker is driven out of business, I can see a return to street betting and the other conditions which pertained prior to the recent Betting Act. The Government's proposal can have long term implications.
I know that the Financial Secretary is sympathetic, because I have had discussions with him. I hope that he will accept this Amendment and allow payment to be made monthly and also that he will give

special consideration to the case of the smaller bookmaker.

Mr. Herbert Butler: I am sorry that I did not hear the whole of my right hon. Friend's speech. However, I arrived in time to hear him say that it would be very difficult to collect the duty and that the Treasury could not meet the requirements in this respect. Having read the proceedings in Committee where sympathetic consideration was promised, I fail to understand the argument that it would be impossible to collect the duty in monthly instalments.
For many years, the Labour movement has argued that the rateable value of residential premises has in many cases been inequitable because people are not always able to choose where they reside.
Since the inception of betting shops, I have served on a betting committee which covers a very large area. The Act requires betting committees to consider the requirements of their neighbourhoods. Certain planning permissions have to be obtained from local authorities, and then a decision is made in each case before an applicant can open a shop. In the area which is familiar to me, sometimes a large shop becomes available and sometimes a small shop. Providing that certain physical conditions are present, the betting committee will usually agree to an application.
I am no friend of bookmakers. I do not bet. I am no friend of people who gamble. But to impose a tax which is three times the rateable value of premises which are used for a legitimate business has no relevance to equity. It is imposed in an arbitrary fashion. It has no relation to the facts of life and the capacity to pay of the person engaged in the business. It is merely because a shop is sited in a main street as opposed to a back street. But a back street shop may do three times the business of a shop in the main street, because there are often one or two betting shops in the main street.
If a local authority puts up rails at the edge of the pavement in front of a shop and people cannot pass directly from one point to another, they will not go into the betting shop, furniture shop or other shops. The siting and size of a shop in which a person carries on his


business is purely fortuitous in many cases. Fundamentally, therefore, the rateable assessment of premises, either for the purpose of residence or for carrying on a business, should have no relation to the amount which people pay to the Exchequer. The relevant consideration should be the profitability of the business in which they are engaged. This runs counter to the whole principle of taxation, which is the ability to pay.
I am not particularly enamoured of the activities of people engaged in betting professionally or otherwise, but we must have regard to the equities of the situation. In this instance, my sympathy lies with those who are engaged in this particular profession.
I have a business in my constituency and I know the feelings of people in the area. Even today there is an increasing tendency towards street corner betting with people not conforming to the law taking bets and not only avoiding this, but avoiding other impositions placed upon the betting fraternity. There will be an increase in this type of betting, and then on the telephone, instead of people going into betting shops.
I am not arguing about the morality of these things or whether we should have this form of conduct. But the man or woman who is carrying on a legitimate business, in accordance with the law, is faced with an imposition which is entirely inequitable and should never be imposed.
My right hon. Friend has said that he will sympathetically consider the matter. It has been pointed out that local authorities encourage people, in order that they should not be faced with a high bill, to pay their rates in weekly, monthly or quarterly instalments. I can assure my right hon. Friend that many small bookmakers are now in the position that, whereas before they often wanted to sell out to Ladbrokes and other people, they are facing the shutting-down of their businesses consequent upon all kinds of impositions. The Act never visualised making facilities available for the big boys in the betting business to take over the smaller ones. This is the last thing that we, on this side at any rate, want if the Government say that these are legitimate businesses. Surely, we do not want people due to our powers of imposing taxation and levies upon them,

to be the victims of the big boys who have stepped into this business.
I ask my right hon. Friend to look again at the argument which he has advanced. He said that it could not be done because it was administratively difficult. That may be, but surely we should have some regard to justice and fairness in this matter.

Sir Ronald Russell: I rise briefly to support what has been said by my hon. and gallant Friend the Member for Wembley, North (Sir E. Bullus) and the hon. Member for Hackney, Central (Mr. Herbert Butler).
I apologise for not being here earlier, but I thought that this matter would arise on a later Amendment.
I was present yesterday with my hon. and gallant Friend at the meeting with the North-West London and Middlesex Bookmakers Association Ltd. Great hardship is being caused to the small bookmakers, whose interests we should protect even more than those of the larger ones. I hope that the right hon. Gentleman will look at this matter sympathetically in view of the street corner betting which is likely to be encouraged.
Like my hon. Friend, I am not a betting man, but an injustice is being done here. I hope that the right hon. Gentleman will give serious consideration to this in his usual sympathetic manner, and put the matter right, because it is doing a great deal of harm to small bookmakers.

Mr. Hamling: I should have preferred to have had Amendment No. 5 selected, because that would have suited my case much better than the Government Amendment and the consequent Amendments that we are considering. I should have liked an Amendment to abolish this tax altogether, because it is a bad tax, but I cannot argue that except in an indirect way in so far as it is relevant to this Amendment.
I should have preferred, when we were presented with this tax, and bearing in mind the Amendment before us, to have had a much more satisfactory explanation of why the tax was put on at all. My right hon. Friend says that the general justification is that we must have some more revenue from this area, and that this is somewhat less than 1 per cent. of the entire turnover.

Mr. Deputy Speaker: Order. The hon. Member cannot, on this Amendment, argue the whole principle of the tax, but only whether it should be paid by instalments.

Mr. Hamling: I mentioned that only in passing. I want to come to the point of the Amendment. The Government are proposing that people should pay half the injustice at one date, and half the injustice at another. The fact that someone has to pay an unjust tax in instalments does not make the tax any more just. It merely spreads the injustice over a longer period, and perhaps makes the point of irritation more frequent.
What we are asking people to do is to pay the tax in instalments before they have the money with which to pay it. I have met a number of small bookmakers in recent weeks, and many of them have told me that they cannot pay even the instalment of the tax, even half the tax, on the date laid down.
A constituent friend of mine, a bookmaker, lives in Eltham. He is having to sell four of his shops because he cannot meet this sort of obligation, and even if the Amendment is carried he cannot meet it. He has five shops and he may have to sell the lot and perhaps go out of business. He and his family have been reputable bookmakers for about 60 years.
The Amendment is not good enough, because the instalments referred to are based on rateable value, and this is inequitable. The instalments are inequitable. The bookmaker whom I mentioned has a turnover of about £25,000 a year. I have seen his books and his returns of tax, so I know that the figures are accurate. I have been through them carefully. The rateable value tax he will pay is £780, which is 3 per cent. of turnover. He will be expected to pay the first instalment of £390 before he has earned a halfpenny. He cannot do it. The money is not in his shop to do it. That is what the Amendment does, and what goes for him goes for others too.
This proposal is grossly inequitable as it affects one betting shop as against another. This man has five shops. The rateable value of Belvedere is £184. The levy will be £550. The rateable value of Wood Green is £78, and the levy will be £294. The turnover of these shops bears

no relation to the rateable value levy. To that extent I cannot find it in my heart to accept the imposition of tax under the Chancellor's Amendment. I have been sent figures of one shop with a turnover of £69,000 which is liable to pay only £150 in rateable value levy. That bears no relationship to the position in which many other small bookmakers find themselves.
I ask my right hon. Friend to look again very closely at the whole basis of this tax and to take it from me that the Amendment is not sufficient to deal with the difficulties being experienced by many small betting shops I am afraid that as a result of this imposition some betting shops will close. Far from increasing the amount of revenue, there will be less coming in.

9.0 p.m.

Mr. Harold Lever: I recognise the criticisms of rateable value as not being necessarily the ultimate in perfection in assessing the appropriate rates of duty. I accept that there are better and more precise ways for applying taxation where they are possible and appropriate. Certainly we shall keep this impost closely under review this year.

Mr. Herbert Butler: What does that mean?

Mr. Lever: It means that we shall examine cases of differentiation such as have been indicated. It is not necessarily either the ultimate in fiscal perfection as a tax or the most permanent instrument of tax. In other words, it does not follow that on review the differential that we were seeking to achieve would be repeated in this form if it produced the kind of difficulties suggested.

Mr. Butler: What happens to the small bookmaker who has gone broke while the review of the position is being undertaken?

Mr. Lever: The suggestion that small bookmakers will go broke in the meantime is somewhat exaggerated. The average cost of this duty is about 1 per cent. Some people may be paying 2 per cent. or even 3 per cent. of their turnover, in which case a certain degree of difficulty may arise, but it is quite out of the question that they will go broke in one year.
Duties of this kind have been imposed before in relation to rateable value, and they are still in existence in respect of gaming premises. The hon. Member for the Isle of Thanet (Mr. Rees-Davies) says that he does not know of a case where a licence requires payment in advance of earning the money. I can give him one example: casinos pay up to £100,000 when they get their licences, and they have to pay it in one lump sum. We must be realistic about this. This provision was announced in April, and bookmakers were told that they would have to pay the lot in October. It was then thought that six months would be enough time. I looked at the position with real sympathy, however, and I decided that we could reasonably split the payments so that bookmakers paid half in October, after six months' warning, and the other half nearly six months later, so as to temper the wind to the shorn lamb and not put the lamb entirely out of business —if lamb is the appropriate description.

Mr. Rees-Davies: Not only was there the most violent objection to that, in terms of rateable value; it must be remembered that only 12 premises pay that high rate of tax, and they have already made substantial sums of money as assets to enable them to pay the rateable value tax. If it be a precedent of any kind it is of singularly little value.

Mr. Lever: The hon. Gentleman said that he had never heard of any such thing occurring, and I gave him one example. The bookmakers were given six months' warning in April that this would come in October. I will certainly keep a keen eye on all that is happening. I accept that it is not necessarily an ultimate and permanent way of achieving the Chancellor's objective.
Might I say a word about the comments, kindly intended towards me but most unjust towards the Chancellor, made by the hon. Member for the Isle of Thanet. He was not his usual self in making these criticisms of my right hon. Friend. I can assure him that the Chancellor has been closely concerned with every aspect of this Finance Bill.
The detailed labour that goes into it is such that no hon. Member could say that there is a single Treasury Minister, least of all the Chancellor, who is in danger of

underwork or not contributing enough time and effort towards the preparation of the Budget. I am sure that the hon. Member, when he comes to reflect on this, will not want to persist in his remarks.

Sir E. Bullus: When the right hon. Gentleman says that he promises to keep this under close review, is he speaking personally or does he mean that if perchance he goes to some other post the Department will watch it closely?

Mr. Lever: I am speaking for the Government. It will be Government policy to watch it closely. The views I have expressed are not merely a personal commitment or a reflection of my personal attitude. I am reflecting a governmental attitude towards this. I understand some of the disquiet of my hon. Friends, but I hope that they will accept this assurance, and also accept that we have given every reasonable assistance to these people.

Mr. Arthur Lewis: My right hon. Friend has spoken about the difficulty of accepting monthly payments but has not said a word about doing it by giro.

Mr. Lever: The difficulty about accepting payments that are too fragmented is that these are licence payments. It is easy for us to get a giro list of people in default or in arrears. The problem will arise as to whether these people ought to be treated as though their licence was not in existence because they were in arrears. Many thousands of people are concerned. This presents a technical difficulty. If licence fees are paid in arrears are the men to be suspended?

Mr. Arthur Lewis: They should be monthly in advance.

Mr. Lever: It is a problem of chasing many thousands of people.

Mr. Rees-Davies: I know what the Treasury thinks, and it is quite wrong. It thinks that bookmakers will not pay. The Government have taken powers to cancel or suspend bookmakers' licences. If they do not pay then they will go to the justices, and the licence will be suspended or cancelled. They will pay all right, they will have to. They cannot afford to wait on the ordinary Inland Revenue processes or they will find themselves summoned with a view to cancellation.

Mr. Lever: It is a question of balance. We are talking of relatively small sums, £100 to £150 from these small bookmakers. It will be found that the larger bookmakers will be able to manage it. We have given them an extra five months, making nearly a year in all. I would have liked to have met all the requests, but I cannot go beyond what I have told the House. I offer the House the assurance that this will be kept under consideration as it operates.

Amendment agreed to.

Further Amendment made: No. 91, in page 82, line 7, leave out from 'betting' to end of line 15 and insert:
'then, subject to and in accordance with the following provisions, the holder of the licence shall be entitled to a partial repayment of duty.
(2) If at the time of the surrender of the licence the whole of the duty has been paid, the repayment under this paragraph shall be—
(a) three-quarters of the duty paid, if the licence is surrendered before 1st January;
(b) one-half of the duty paid, if the licence is surrendered on or after 1st January and before 1st April; and
(c) one-quarter of the duty paid, if the licence is surrendered on or after 1st April.
(3) If, by virtue of the exercise of the option under paragraph 4A of this Schedule, only half of the full duty on the licence was paid at the time of the grant, and the second half has not been paid, there shall be no repayment under this paragraph unless the licence is surrendered before 1st January, and the repayment shall then be one-half of that which has been paid.—[Mr. Harold Lever.]

Schedule 9

PROVISIONS RELATING TO BINGO DUTY

Mr. Harold Lever: I beg to move Amendment No. 92, in page 85, line 34, at end insert:
(b) on any premises in respect of which there is for the time being in force a gaming machine licence under section 5 of this Act, and which have local authority approval under the Gaming Acts by virtue of paragraph 6 of Schedule 11 to this Act; or.
This Amendment fulfils an undertaking which I gave in Committee to an hon. Member opposite who is not present. It is a relatively minor Amendment. Its effect is to simplify the formalities which would otherwise have to be observed to qualify for exemption when the Gaming Act, 1968, comes into operation.

Amendment agreed to.

Clause 5

GAMING MACHINES

Mr. Deputy Speaker: The next Amendment is No. 6, plus the Amendment to it in the name of the hon. Member for North Fylde (Mr. Clegg)—in line 3, at end insert:
'and provided that "a penny machine" shall be capable of having more than one slot through which a penny can be placed to operate such machine'.

Mr. Harold Lever: I beg to move Amendment No. 6, in page 8, line 28, at end insert:
'and that Schedule: and for those purposes a "penny machine" is a gaming machine which, in order to be played once, requires the insertion of a single penny and which cannot be played in any other way'.
The effect of these Government Amendments is to create a new category of gaming machine licences to be known as holiday season licences. Holiday season licences will be valid from 1st March to 31st October in any year. They will be available only for premises covered—

Sir Stephen McAdden: On a point of order. I think that the Financial Secretary is dealing with the wrong Amendment.

Mr. Lever: I hope that I have not confused matters; I am on the right Amendment; the hon. Gentleman is mistaken.
The effect of these Government Amendments is to create a new category of gaming machine licences to be known as holiday season licences.

Sir S. McAdden: On a point of order. You, Mr. Deputy Speaker, called the Financial Secretary to move Amendment No. 6, which deals with the definition of a penny machine, not with holiday licences. I have no objection to the right hon. Gentleman discussing gaming machine licences, but I do not think that he is dealing with the Amendment you called him to move.

Mr. Deputy Speaker: The hon. Gentleman's impression coincides with mine.

Mr. Lever: I am referring to Amendments Nos. 6 to 9, 13 to 23 and 93 to 106. This is the group of Government Amendments of which No. 6 is the first. We


must take them all together in order to understand them.

Mr. Patrick Jenkin: On a point of order. Perhaps the Financial Secretary was not present yesterday when we encountered this difficulty. The Government spokesman, when moving the first Amendment, announced that it was the first of a series of Amendments. We on this side of the House have had no intimation that all these Amendments were to be grouped together. We are not prepared at this stage to agree to that. We should like the Amendments to be taken separately. If a number of Amendments are to be taken together, we should be grateful if we had advance notice.

Mr. Lever: If it is the wish of the House, I shall deal with the Amendments separately.
Amendment No. 6 introduces a definition of a penny machine. The definition is restricted to those machines which can be played once on the insertion of a penny piece. It does not apply to machines made playable on the insertion of a token's worth of a penny or machines which offer three goes for a sixpenny piece or three goes for 6d. It is strictly limited to the definition of a penny machine.

Mr. Deputy Speaker: I understood that the objection of the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) was not to the Amendments being taken as a group but to the fact that prior notice was not given.

Mr. Patrick Jenkin: On a point of order. There is a point of substance here. The selection which Mr. Speaker was good enough to make indicated on a number of occasions when two Government Amendments were to be taken together. We would not insist on a change in the usual procedure if two or three Amendments obviously hang together, but when the Government intend to dot about in the Amendment Paper and deal with several Amendments of substance together I should be grateful if we could have notice.

9.15 p.m.

Mr. Lever: I did not realise that notice had not been given to the other side, and I must apologise for it.

Mr. Rees-Davies: I know that my hon. Friend the Member for North Fylde (Mr. Clegg) would have wished to move as an Amendment to the proposed Amendment No. 6, in line 3, at end insert:
'and provided that "a penny machine" shall be capable of having more than one slot through which a penny can be placed to operate such machine'.
I bring it to the attention of the House so that the Financial Secretary may have an opportunity to deal with the case of the penny operated machine which can be used with a number of slots—usually, I think, four or five.

Mr. Arthur Lewis: I understand that the penny coin is to be done away with very shortly. Will my right hon. Friend explain what will happen when we do not have the penny? Will the definition then have to be redefined, or will it cover the position as it will be in six months' or 12 months' time, or whatever the period may be when these machines are operated by coins other than those called pennies?

Mr. Lever: This definition will stand as long as the penny remains. When pennies go the definition on the Statute Book will not have much relevance.

Amendment agreed to.

Mr. Harold Lever: I beg to move Amendment No. 7, in page 8, line 29, leave out from beginning to 'licence' in line 37 and insert:
(3) A gamine machine licence shall be either—
(a) an ordinary licence, being—
(i) a whole-year licence for the period from 1st October in any year to 30th September in the following year, or
(ii) a half-year licence for the period from 1st October in any year to 31st March in the following year or from 1st April in any year to 30th September in that year; or
(b) a holiday season licence (for penny machines only) for the period from 1st March in any year to 31st October in that year,
(all dates inclusive); and where a licence of either description is granted so as to have effect for the remainder of a licence period which has partly expired, the charge to duty shall be unaffected by the circumstance that a licence of the other description has been in force in respect of the same premises for any part of that period.
(4) The duty on an ordinary.

Mr. Deputy Speaker (Mr. Sydney Irving): With this Amendment we may take the following:

Amendment No. 194, in page 8, leave out lines 30 to 36 and insert:
(a) a licence for any period of twelve months running from the beginning of the month in which the licence first has effect;
(bs) a licence for any period of four months running from the beginning of the month in which the licence first has effect; or
(c) in the case of any such premises as are mentioned in section 27(3)(a), (b) and (c) of the Gaming Act, 1968, a licence for any period of seven consecutive days.

Amendment No. 195, in page 10, leave out lines 16 to 18 and insert:
(7)(a) The duty on a licence for a period of four months shall be eleven-thirtieths of that which it would have been if the licence were a whole year, but otherwise identical, licence;
(b) the duty on a licence for a period of seven days shall be one fifty-second of that which it would have been if the licence were a whole year, but otherwise identical, licence plus ten per cent. of that amount.

Mr. Lever: The Amendment affects the distinction between ordinary licences, the licences dealt with in the Clause as drafted, and holiday season licences. It provides that holiday season licences apply to the penny operated machines only, and it sets their period of validity as being from 1st March to 31st October inclusive. It also provides that if a holiday season licence is exchanged for a unexpired ordinary licence, or vice versa, the duty on the new licence is unaffected by the fact that duty has been paid on the superseded licence.
I do not know whether I can usefully illumine that by pointing out that the effect of these Amendments as they go along is to provide a new category of gaming machine licences to be known as holiday season licences which will be valid from 1st March to 31st October in any year. They will be available only for premises covered by local authority permits under the social law, and where the gaming machines are penny operated machines. The duty on holiday season licences will be £15 for each penny operated machine, and the first holiday season licences will be issued for a period beginning on 1st March, 1970.
The Amendments also exempt from gaming machine licence duty to October, 1969, premises which satisfy the conditions relating to holiday season licences. Gaming machine licences dealt with in the

Clause as drafted are unaffected, except that they become known as ordinary licences. Ordinary licences will continue to be available for those not wanting holiday season licences, or for holiday season licence holders who want to operate outside the holiday season. The effect is to get these licences for penny operated machines from 1st March to 31st October at £15 a year, which is very much less than the proportionate charge.
This is an attempt to give effect to the wish of both sides of the Committee to distinguish between Seaford and Soho, or the seaside and Soho. This will provide a very cheap rate for penny operated machines for people who need them only in the holiday season from March to October, but will leave the original rate still in force for those who use them all the year round.
If it is felt by those who have to pay the whole-year duty that these people are being unfairly treated with great indulgence by us the answer is that although these holiday people have an eight-month licence they will be very lucky if they are able to use them for eight months in the year. My reasoning in making this reduction was that very often these people will be able to use the eight-month licence only for a few weeks in the year, owing to the inclement and, to some extent, unreliable character of the British weather at the times when the British holiday makers take their holidays.

Mr. John Hall: Has the Financial Secretary considered the average earnings made by these machines in the summer?

Mr. Lever: That varies a great deal, but we have a great deal of evidence. I went into this matter with great care. When the duty was fixed at £15 for the holiday season licence I think I erred on the side of generosity in my recommendations to the Chancellor rather than on the side of severity. Instead of £75 they will pay a mere £15 for eight months of the season. I am satisfied that this is an effective reduction which will help even the less fortunately placed operators. It is no good giving a series of figures in relation to the take of these machines. It varies greatly from one place to another. Having studied in great detail what the takings were as returns for tax


and other evidence showed, I recommended the reduction which my right hon. Friend accepted. I think this takes care in a generous way of the wishes expressed by hon. Members on both sides of the Committee.

Mr. Rees-Davies: On a point of order, which I think is quite important. This Amendment deals only with the period of licence, not with quantum or the time which arise on Amendments Nos. 10 and 15. This is a very narrow Amendment dealing with the introduction of holiday season licences and the appropriate period for which there is a reduction. I mention that because the Financial Secretary appeared to go rather wider.

Mr. Speaker: I am grateful to anyone who narrows a debate. With this Amendment we are discussing Amendments Nos. 194 and 195. The House might like to be reminded that this is the third or fourth of 40 debates we are to have during two days on Report.

Sir S. McAdden: In moving Amendments Nos. 194 and 195, I start by saying how much I appreciate—

Mr. Speaker: The hon. Member is not moving those Amendments but may speak to them.

Sir S. McAdden: I start by saying how much I appreciate the care and thought which the Financial Secretary has given to representations made to him on this narrow question of validity of the licence. I shall not be tempted into the realms of disorder into which the Financial Secretary sought to lead me by dealing with the amount of duty paid on these machines. I will confine myself strictly to the period of the validity of the licence. Because the Financial Secretary was courteous and generous in listening to complaints made to him, it is all the more regrettable that I had to interrupt his preliminary remarks. It is important that we should keep to the narrow point of the period of validity.
The right hon. Gentleman has made a substantial concession. The Amendment extends from six months to eight months the period during which a licence may be held by a holiday season amusement arcade proprietor. Later I hope to have the pleasure of catching your eye, Mr. Speaker, and of speaking at a little more

length—but not much—on the problems of seaside proprietors. Now I urge on the Financial Secretary the importance of considering giving some kind of relief to other kinds of operators as well. In this connection I am trying to help the Treasury to get some money. It so happens that unless the Treasury provides some opportunity for people to get licences for a shorter period than six months it may conceivably lose a great deal of revenue. Some of the machines involved in this operation cost several thousands of £s and considerable sums in purchase tax have been paid in respect of them. They will become unusable if they are compelled to be used for the whole period of one year or even for six months. Amendments Nos. 194 and 195 seek to create fresh periods ranging from four months down to seven days. I have no doubt that to the Customs and Excise the suggestion of a period of seven days for a licence comes as a great shock, but some organisations and clubs run a function once a year—for instance, a carnival—when a seven-day licence would be of great value.
Despite the administrative difficulties, the extent of which I concede, if the Treasury could see its way to creating opportunities for a seven-day licence and a quarterly licence based upon the proportions of the licence fee set out in Amendments Nos. 194 and 195 it would at least get some revenue where otherwise it would get none and it would give relief to some organisations which would greatly welcome it.

Mr. John Farr: I thank the Financial Secretary for the arrangements he has made consequent upon representations he received from both sides. I am grateful to him for reducing the special licence fee for 1d. machines to £15. I thank him for his sincerity and sympathy and for studying the case which was put to him. I hope he can assure me that, if it should transpire that this licence fee of £15 a year, which seems little enough, but which takes a great deal of getting from ld. a time machines, is working unfairly or harshly on some 1d. machine operators, we can come to him next year and present any fresh statistical evidence that we have gained as a result of a season's working.

Mr. Harold Lever: I thank the hon. Member for Harborough (Mr. Farr) for


his attitude. We will keep in touch with this matter. I had discussions with the associations most affected before coming to the conclusion about the £15. I have a feeling that they are surprised as well as happy at the level at which I have been able to recommend this duty. I think that we have met them on this matter. It is impracticable to take instalments weekly or monthly. Much as I would like to help in that way, it would place an impossible burden on the Customs and Excise.

Amendment agreed to.

Further Amendments made: No. 8, in page 9, line 7, at end insert:
'for the purposes of an ordinary licence'.

No. 9, in line 20, leave out 'a' and insert an ordinary'.—[Mr. Harold Lever.]

Mr. Rees-Davies: I beg to move Amendment No. 10, in page 9, line 33, leave out 'one' and insert every'.

Mr. Speaker: With this Amendment the House can discuss also the following

(8) A holiday season licence shall be granted only for premises as to which the Commissioners are satisfied that they will, on the date on which the licence is first in force, have local authority approval under the Gaming Acts by virtue of paragraph 5 or 6 of Schedule 11 to this Act; and—



(a) the licence shall be one which authorises the provision only of penny machines up to a number specified in the licence; and



(b) the duty on the licence shall be £15 multiplied by that number.

Also the sub-amendment: (w), in line 5, leave out from beginning to end of line 7 and insert:
(a) the licence shall be one which provides that not more than one-third of the machines authorised by the licence shall be machines other than penny machines;
(b) the duty on all penny machines authorised by the licences shall be £15 each;

And (x), in line 7, leave out '£15' and insert'£f12–10–0'.

9.30 p.m.

Mr. Rees-Davies: The effect of that arrangement, Mr. Speaker, is that we can deal in one general debate with the position of the amusement trade on the Amendments which cover the amount of tax on the machines, leaving outstanding only one issue on Clause 5, namely, that raised by Amendment No. 16, which deals with multi-player machines. I mention that so that those hon. Members who have come into the debate will understand what the position is. There is a separate narrow issue dealing with multi-

Amendments: No. 11, in page 9, leave out lines 35 to 37.

No. 12, in page 9, line 40, leave out'£150' and insert £75

As the hon. Member for the Isle of Thanet (Mr. Rees-Davies) reminded us, this Amendment is narrow in its own field as the other was in the previous field.

Mr. Rees-Davies: On a point of order. It might be for the convenience of the House and probably also for the convenience of the Financial Secretary if we traverse also the ground covered by Amendment No. 50. Amendments Nos. 10, 11 and 12 deal with a straight tax of £12 10s. The Government, after these Amendments had been tabled, tabled Amendments to reduce the amount to £15 in respect of a holiday season licence. So all the Amendments go together.

Mr. Speaker: This makes perfect sense to me, if there is no objecion from the Government. So we will take also Amendment No. 15, in page 10, line 18, at end insert:

player machines arising on Amendment No. 16. The debates can in that way be channelled into a fairly narrow compass. The present question is, so to speak, the main question.

Our Amendment would provide that all 1d. machines should pay a flat-rate tax of £12 10s. Following a deputation with which I saw the Financial Secretary, the right hon. Gentleman posed what seemed to be a fair question. The Government wished to hit this trade as hard as if it were carrying a tax similar to the tax on whisky, that is to say, to the maximum amount without at the same time leading to the law of diminishing returns. Therefor, there came the difficult question of deciding what would be the sum which would extract the last drop from the trade without sending it into bankruptcy. The figure we came up with was £12 10s. for all 1d. and 3d machines in the country, leaving the other machines, the 6d. machines, to bear the high impost demanded of them by the Government.

Why did the Government go so hopelessly wrong in grossly overtaxing this trade? That they did so is evident from Amendment No. 15, the holiday season licence at £41 5s., and the new rate of £15. True, they have taken two steps for which they deserve to be congratulated. First, they have introduced the holiday season licence which will assist seasonal areas and seaside resorts and do something to enable a number of operators to continue in business, although many will still go into liquidation. Second, they are to be congratulated—or the Financial Secretary is to be congratulated—on listening to the argument and not merely introducing the holiday season licence but bringing the figure down to £15.

I advance several points to support my figure of £12 10s. These points must be beyond dispute. First, in this trade, unlike others, there is no expansion of custom, no question of increasing turnover. Second, with a machine or amusement with prizes there is a fixed figure which is not passed to the customer. It must be borne by the operator. It follows from that that the tax is entirely met by the operator. Next, the operating overheads amount to about 50 per cent. of the takings.

Next, in a seaside arcade—the "Dreamlands" and other places in which amusements with prizes are available—there are many machines which are really no more than furniture. Out of the total number of machines some are used heavily and others scarcely at all. To tax them all at the same rate would be unfair. Therefore, in considering whether every machine should be taxed at a flat rate of £12 10s., one takes into account that some machines are what is known in the trade as mere furniture. It will be difficult to get rid of them, and I have taken that into account in assessing the figure.

Next, there will be a heavy loss of capital on discarded machines. There is a constant turnover of investment capital. What the Treasury forgets is that in many cases it is dealing with machines which are novelties, lasting for a mere year or two. The capital involved is very great. The machines cost from £200 to £2,000.

It must also be borne in mind that purchase tax of 36⅔ per cent. is paid on

all these machines, and, perhaps more important, that if we reduce the overall number the Treasury will lose not only the purchase tax but the income tax and corporation tax, and the revenue to the local authority from the seaside piers will also be lost. All these points must be borne in mind in considering the appropriate level of taxation.

In certain holiday camps and selected seaside resorts, a number of arcades and operators of renown have a captive audience. Butlins is one example, with a large captive audience. The figures we supplied to the Treasury came from its concession agreements, together with those of the British Automatic Company and others, so that the Treasury could see the highest figures which could be attained, where there is a substantial, steady audience. The profits are higher there.

What will be the effect if the tax is not reduced to the best effective level, which we say is no more than £12 10s. for the penny machines? First, there will be the ruin of the rapidly building export trade. Second, there will be the loss of the present import-saving.

The purchase tax paid by the two main companies exceeded £2 million last year. Those companies were Bell Fruit and Automatic Coin Equipment. The foreign currency saving by Bell Fruit alone as a result of the reduced imports of American, Australian and Japanese machines was more than £4 million in the past 18 months, and in the case of Automatic Coin Equipment the original estimates for exports in 1969 are over £6 million.

In 1968 Phonographic exported £315,000-worth of machines, and Automatic Coin Equipment more than £250,000-worth. Those figures have not been appreciated by the Treasury. They were not available to it at the time it introduced these measures. Why was not there consultation with the trade in 1968 or this year before the Budget, as there was in 1966 when the Government announced before the Budget that they would impose certain duty? The result has been that the Treasury has imposed hopelessly unrealistic rates of tax on the industry, which will mean many companies going into liquidation.

The danger is considerable in the case of the Crompton factory in my constituency. I have grave doubts as to whether


it will be able to continue the export of machines and the import-saving it has developed.

I have pointed to the general criteria which should have been taken into account but have not. There are many such factors to which I could refer, in addition to those I have mentioned. I want briefly to give only one or two examples which I think will appeal to the House. At 15, Marine Terrace, Margate, there is a small operator. He has 90 machines at 1d. If he obtains a holiday season licence, under Amendment No. 15 that means paying £1,350. He has 11 machines at 6d., which means paying £1,650. Therefore, on the Government Amendment the tax he would have to pay is a minimum tax of £3,000 for the coming year.

If he were to get an ordinary licence—and we believe that this should be carried through for the 1d. machines—he would have to pay £6,750 for 90 such machines. But he can operate only on a holiday season licence. Even by paying £3,000, this man's gross takings, according to a chartered accountant, are £4,325. After deducting overheads and when he has paid his taxes, he will be unable to operate even under the Government Amendment. That is why I said that, when we provided for £12 10s. right the way through, we were working to the largest possible figure based on the same sort of inequities we have had to suffer from the whisky tax.

Mr. Russell Kerr: Does it not occur to the hon. Gentleman that perhaps this man is operating an uneconomically large number of machines?

Mr. Rees-Davies: It is not large. An establishment with 90 machines at 1d. and 10 at 6d. is rather small. In the main, these places are bigger. Most of the concessionaires operate a great many more. It is the small operator with 90 or 100 machines who is going to go into liquidation. The big companies operate over 20 to 25 sites located all over the country. Some pay very well and others do not, but the companies can afford to carry from the profits of their best what I would call losses on the others.
Unfortunately, the figures show that there are 450 to 500 sites in the seaside

resorts. These are figures which the Government have not obtained but which are available to the trade associations. They show that three-quarters of these 450 to 500 are site operators with not more than one or two sites. It is these people who are going into liquidation. It is the small man who will go into liquidation and the big man who will survive.
I give the example of Butlin's camp at Ayr, with 30,000 campers a year and, therefore, a captive audience. It has 550 Id. machines which, at 15.s., gives £7,725; the 30 machines at 6d. give £2,500 and the tax which will be borne is £10,000 a year on the new Government Amendment. The net profit to the concessionaire in that case—Mr. Peter Manning—is only £9,000, so that the tax to be paid will still be higher than the whole of the net profit. It will mean that Butlin's will have to cut down the charge they make to the concessionaire and there will be little profit in it for either of them.
Let not the Government think they are being generous with their Amendment. It is an endeavour to proceed along the right lines. It will assist with the holiday season licences for penny machines, but it will still mean the end of the others. No concession is given—as in the case of Amendment No. 10, which would reduce the level from £150 to £75—for 3d. machines. It still mean; that we shall see, over the next year, the liquidation of many small companies with subsequent loss of purchase tax, corporation tax and exports—and all this could have been a saving if only the Government had properly consulted the industry before they came forward with their Budget.

9.45 p.m.

Mr. Norman Miscampbell: I appreciate that the time of the House is short and I intend to be brief. I wish to make one general observation and one particular observation on the Amendment. I support the Amendment because I should like to see the lowest possible rate of taxation upon these machines. In no sense can 1d. machines in arcades and in seaside resorts be described as hard gambling, or as gambling machines of any description. I find it incredible that they should be subject to any form of taxation. If there is to be taxation, then this Amendment reducing the tax to £12 10s. is to be welcomed.
My particular point is this. Most arcades have a variety of machines, 1d., 2d., or 3d. machines. As I understand the position—and I should be grateful for correction if I am wrong—a person can have as many ld. machines as he likes, but if he has one or two 2d. or 3d. machines among them he will not be entitled to the concession which is later to be made of £15 for all of them. I see the Financial Secretary is nodding his head.
If that is the position, those who operate small arcades will inevitably find that they have expensive machines which take 2d. or 3d., and, if they are to get the concession, they will have to scrap these most expensive machines. This is neither in the interest of the Government nor in the interest of the industry.
I deplore the tax that has been imposed upon these small machines for the reasons which I have given. I can see no reason for applying a tax on gambling to these machines, and I should like to have an assurance that consideration will be given to making sure that where there are mixed arcades the whole arcade will not be taxed as it is under the present provisions, but that the machines will be taxed independently.

Sir S. McAdden: I recognise that this is a considerable reduction on the original fee proposed of £75 per machine. That shows how ridiculous was the original proposal and how out of touch with reality were those who proposed it. The proposal to reduce the tax to £15, while acceptable, should not preclude us from arguing that it is still a bit unrealistic.
I do not want to bore the House with mental arithmetic, but £15 in pennies is 3,600 pennies, so to collect in the machine the £15 licence fee it is necessary to have 3,600 pennies going into the machine, but that is not the end of the story. People will not keep on putting pennies into the machine unless they get something out. The Gaming Board is hoping to introduce legislation to make it obligatory for 85 per cent. of what goes in to come out in prizes.
It is not just a matter of 3,600 pennies going into a machine. About 24,000 pennies must go into each machine before the operator can achieve the £15 he needs to be able to pay the licence fee. He

then has to pay his overheads. A sum as large as about 24,000 pennies is equal to 400 5s. bags of copper—a tea-chest full of coppers. It takes a long while to get all those coppers together.
The Treasury may feel that it is being generous, but it is certainly putting a heavy burden on amusement arcade operators in the country who have no other means of livelihood than their amusement arcades and rely upon people visiting them. I am grateful for what the Treasury has done, but amusement arcade operators still carry a severe load.
My hon. Friend the Member for Blackpool, North (Mr. Miscampbell) referred to the people who within the law have purchased expensive machines to take 3d. and 6d. and who are now to be prevented from using them because of the prohibitive licence fee they will have to pay if they wish to continue using them. They cannot even sell the machines because nobody will buy them.
Will not the Treasury have another look at this matter? They started off well. They have come down from £75, which was absurd, to £15, which is becoming reasonable. Why not give operators the other £2 10s.? If the Treasury will be happy and accept the Amendment, I will be happy, too.

Dame Irene Ward: This is a rather new subject for me to speak upon. I am not acquainted with all the mathematical calculations of these machines. But when I see the figures relating to amusement arcades put to me by the local authorities in my area, I wonder whether this is not also a new subject for the Financial Secretary. Although I rarely win a battle with the Fnancial Secretary—we all think that he is pretty good at argument, and it is difficult to get on top of him—I would point out that a concession is no concession at all if it does not keep people in business. It is so near and yet so far away from filling the bill.
I cannot understand how anybody as expert as the Financial Secretary could ever have permitted himself to impose taxation on some of these small people who make a great contribution to the seaside resorts. The duty that he is imposing is much more than the gross takings. I know that I must not pursue this subject, but I now know why our


whole financial position is in such a muddle. I cannot believe that this duty was based on the Financial Secretary's own calculations because he is too clever to have made such a mistake. It must be the mistake of those who advise him.
He has certainly never consulted me about this matter. I am a good representative of my own seaside resorts, and I could have told him all about the seaside resorts on the North-East Coast, about our record, our high level of unemployment and the need to attract tourists. We want every penny we can get out of the Government. If he had asked me what would happen as a result of this ridiculous level of taxation, I gladly would have given him an answer.
A well known seaside resort in my constituency is Whitley Bay. Through its town clerk, the urban district council tells me that this duty will have a devastating effect on that little seaside resort which already has to cope with many difficulties which I need not recapitulate. It is tremendously important for the Government to give better reliefs to business people in such places in order to help keep them in business. In the North, we always hear that people do not come to our seaside resorts because of the climate. This Government think that they are very grand, but even they cannot alter the climate. However, they can help support the attractions of our resorts.
I propose to quote one or two figures, although I am sure that the Financial Secretary will tell me that I have them wrong and have not taken account of concessions which the Government have already given. He is probably right, because I find it very difficult to follow them. In my constituency, there are the two resorts of Tynemouth and Whitley Bay, but the same argument applies to the whole of Northumberland and even to places in Scotland which will be knocked out by this unendurable imposition.
In the case of the amusement arcade in Tynemouth, the duty required will be £9,550. However, last year's gross takings were only £3,027. If the taxation of the rest of the country is based on that kind of assessment, it is no wonder that we are going down the drain. It is idiotic for people to be asked to pay what it is quite outside their capacity to pay.
In Whitley Bay, there are some pleasure gardens which are greatly enjoyed by everyone. In the gardens, there are three sites containing 1d. amusement machines. The total rental payable to Whitley Bay Pleasure Gardens for the 1968 half-year was £1,600. The duty on the machines would amount to £21,500. The gross takings from the three arcades last year amounted to £6,750.
Very often in this House, I feel like Alice in Wonderland while this Government are in control. Faced with this ridiculous tax I feel like the Cheshire Cat. Alice in Wonderland, the White Rabbit, the Dormouse, the Mad Hatter and everyone else at once. I cannot make sense of the Government's proposal. After all, these small places are struggling to make a profit and to create something of a seaside atmosphere in an effort to attract tourists.
I am sure that the Financial Secretary does not work on the basis of being taxed more than he earns. When taxation is imposed, surely it should be at a level which is within the capacity of people to pay. I know that the Treasury is very keen on analyses. It would be interesting to see a statistical return showing how many other undertakings are taxed more than their gross earnings.
We are told that we cannot have the Prime Minister visit us. Speaking for myself, I would prefer to have the Financial Secretary come instead. I would be delighted to take him round our amusement arcades and let him see for himself the difficulties that they face. In any event, I hope that when he has heard all our pleas he will have some sympathy.

10.0 p.m.

Mr. Harold Lever: I can think of few things more delightful than to accept the suggestion of the hon. Member for Tyne-mouth (Dame Irene Ward) for a conducted tour of the Whitley Bay and ancillary Tyneside and Northumberland arcades. But I should like to assure the hon. Lady that I had the same approach to the matter that she has displayed in her speech. I was concerned not to place upon these seaside operators an intolerable burden which they could not possibly survive in all cases. I consulted with experts in those areas, namely, the operators and their associations. I am quite satisfied, despite the figures put forward


by the hon. Lady, which may have been related to the old £75 duty, that seaside operators with 1d. operating machines, will be able to carry on their businesses and meet the tax on the new holiday season basis.
The predictions of ruin for them or for anybody else will prove, in the event, to be misplaced. We are not in the habit of imposing taxes for the fun of winding people up. We impose duties in the hope of getting them. Hon. Members who have experience of the Customs—and the Inland Revenue, for that matter—know that, in general, our duties are so tuned that we do not kill off the business from which the duty derives.
I have looked into the Amendments with great care, but I do not accept, as a matter of judgment and information, that any of the duties are too harsh or that the concession made for the holiday season proves that there is something wrong in the original rate of duty. The original rate of duty still remains at £75 on a 1d. machine when it is operated the whole year round. We had to do a little thinking before we got to a formula which could be justified and tailored to the needs of the seasonal holiday operators. That is why we get this exceptionally favourable rate which I have outlined.
I must ask the House to reject Amendments Nos. 10, 11 and 12. I hope that it will support the position taken by the Government. The House can rest assured that the ruin predicted from the rates of duty, as amended, will not eventuate.

Mr. Patrick Jerkin: I am sure that the House listened to the Financial Secretary with a growing sense of disillusionment. That he should be so insensitive to the figures quoted by many of my hon. Friends is, for him, surprising.
The right hon. Gentleman said that he has studied the figures. But he knows that, even with the massive reduction which the Government have made from the completely ludicrous figure that they were proposing to charge when the Bill was first introduced, it still represents a substantial slice of the average turnover of the machines at these seaside arcades. I have the impression that, before the Bill was introduced, officials of the Customs and Excise wandered round Soho, made a calculation of what goes into the machines in those exceptional arcades, and assumed that what would be appropriate there would be appropriate throughout the rest of the country.
I suppose that we must be grateful for small mercies. The Financial Secretary, having seen representatives of the industry, now realises that, whatever else was right, that was a nonsense. But he has not gone far enough. The case made by my hon. Friends, many representing seaside constituencies, was very strong. We are bitterly disappointed that the right hon. Gentleman has not felt able to meet it. I believe that we are entirely justified in pressing the Amendment to a Division. I hope that my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies) will think it right to do that.

Question put, That the Amendment be made:—

The House divided: Ayes 172, Noes 246.

Godber, Rt. Hn. J. B.
Maclean, Sir Fitzroy
Rossi, Hugh (Hornsey)


Goodhart, Philip
McMaster, Stanley
Russell, Sir Ronald


Gower, Raymond
Macmillan, Maurice (Farnham)
Scott-Hopkins, James


Gresham Cooke, R.
McNair-Wilson, Michael
Sharples, Richard


Grieve, Percy
Maddan, Martin
Shaw, Michael (Sc'b'gh &amp; Whitby)


Gurden, Harold
Maginnis, John E.
Silvester, Frederick


Hall, John (Wycombe)
Marten, Neil
Smith, Dudley (W'wick &amp; L'mington)


Hall-Davis, A. G. F.
Maude, Angus
Smith, John (London &amp; W'minster)


Harvey, Sir Arthur Vere
Maxwell-Hyslop, R. J.
Speed, Keith


Harvie Anderson, Miss
Mills, Peter (Torrington)
Stainton, Keith


Hawkins, Paul
Mills, Stratton (Belfast, N.)
Stodart, Anthony


Heald, Rt. Hn. Sir Lionel
Miscampbell, Norman
Stoddart-Scott, Col. Sir M.


Heseltine, Michael
Mitchell, David (Basingstoke)
Taylor, Sir Charles (Eastbourne)


Higgins, Terence L.
Monro, Hector
Taylor, Edward M. (G'gow, Cathcart)


 Hiley, Joseph
Montgomery, Fergus
Taylor, Frank (Moss Side)


Hill, J. E. B.
More, Jasper
Temple, John M.


Hirst, Geoffrey
Morgan, Geraint (Denbigh)
Tilney, John


Holland, Philip
Morgan-Giles, Rear-Adm.
Turton, Rt. Hn. R. H.


Hordern, Peter
Morrison, Charles (Devizes)
van Straubenzee, W. R.


Hornby, Richard
Mott-Radclyffe, Sir Charles
Vaughan-Morgan, Rt. Hn. Sir John


Howell, David (Guildford)
Munro-Lucas-Tooth, Sir Hugh
Vickers, Dame Joan


Hunt, John
Nabarro, Sir Gerald
Waddington, David


Hutchison, Michael Clark
Nott, John
Walker, Peter (Worcester)


Iremonger, T. L.
Onslow, Cranley
Walker-Smith, Rt. Hn. Sir Derek


Jenkin, Patrick (Woodford)
Osborne, Sir Cyril (Louth)
Ward, Dame Irene


Jones, Arthur (Northants, S.)
Page, Graham (Crosby)
Weatherill, Bernard


Jopling, Michael
Peel, John
Wells, John (Maidstone)


Joseph, Rt. Hn. Sir Keith
Percival, Ian
Whitelaw, Rt. Hn. William


Kaberry, Sir Donald
Pike, Miss Mervyn
Wiggin, A. W.


Kershaw, Anthony
Pink, R. Bonner
Williams, Donald (Dudley)


Kimball, Marcus
Pounder, Rafton
Wilson, Geoffrey (Truro)


Kirk, Peter
Powell, Rt. Hn. J. Enoch
Wolrige-Gordon, Patrick


Kitson, Timothy
Price, David (Eastleigh)
Woodnutt, Mark


Knight, Mrs. Jill
Prior, J. M. L.
Worsley, Marcus


Lancaster, Col. C. G.
Pym, Francis
Wright, Esmond


Lane, David
Ramsden, Rt. Hn. James



Legge-Bourke, Sir Harry
Rees-Davies, W. R.
TELLERS FOR THE AYES:


Longden, Gilbert
Renton, Rt. Hn. Sir David
Mr. Anthony Grant and


McAdden, Sir Stephen
Ridley, Hn. Nicholas
Mr. Anthony Royle.


MacArthur, Ian
Ridsdale, Julian





NOES


Abse, Leo
Cronin, John
Forrester, John


Allaun, Frank (Salford, E.)
Crosland, Rt. Hn. Anthony
Fowler, Gerry


Alldritt, Walter
Crossman, Rt. Hn. Richard
Freeson, Reginald


Anderson, Donald
Dalyell, Tam
Galpern, Sir Myer


Archer, Peter
Davidson, Arthur (Accrington)
Gardner, Tony


Armstrong, Ernest
Davidson, James (Aberdeenshire, W.)
Gray, Dr. Hugh (Yarmouth)


Ashley, Jack
Davies, Ednyfed Hudson (Conway)
Gregory, Arnold


Atkins, Ronald (Preston, N.)
Davies, G. Elfed (Rhondda, E.)
Griffiths, David (Rother Valley)


Atkinson, Norman (Tottenham)
Davies, Dr. Ernest (Stretford)
Griffiths, Eddie (Brightside)


Barnett, Joel
Davies, Rt. Hn. Harold (Leek)
Griffiths, Will (Exchange)


Baxter, William
Davies, Ifor (Gower)
Hamilton, William (Fife, W.)


Beaney, Alan
de Freitas, Rt. Hn. Sir Geoffrey
Hannan, William


Bence, Cyril
Delargy, Hugh
Harper, Joseph


Benn, Rt. Hn. Anthony Wedgwood
Dell, Edmund
Harrison, Walter (Wakefield)


Bessell, Peter
Dempsey, James
Haseldine, Norman


Bidwell, Sydney
Dewar, Donald
Hazell, Bert


Binns, John
Diamond, Rt. Hn. John
Healey, Rt. Hn. Denis


Bishop, G. S.
Dickens, James
Heffer, Eric S.


Blackburn, F.
Dobson, Ray
Henig, Stanley


Blenkinsop, Arthur
Doig, Peter
Hobden, Dennis


Boardman, H. (Leigh)
Driberg, Tom
Hooley, Frank


Booth, Albert
Dunn, James A.
Houghton, Rt. Hn. Douglas


Boston, Terence
Dunnett, Jack
Howarth, Robert (Bolton, E.)


Boyden, James
Dunwoody, Mrs. Gwyneth (Exeter)
Howell, Denis (Small Heath)


Bradley, Tom
Dunwoody, Dr. John (F'th &amp; C'b'e)
Hoy, Rt. Hn. James


Bray, Dr. Jeremy
Eadie, Alex
Hughes, Rt. Hn. Cledwyn (Anglesey)


Brooks, Edwin
Edelman, Maurice
Hughes, Hector (Aberdeen, N.)


Brown, Hugh D. (G'gow, Provan)
Edwards, Robert (Bilston)
Hughes, Roy (Newport)


Brown, Bob (N'c'tle-upon-Tyne, W.)
Edwards, William (Merioneth)
Hunter, Adam


Brown, R. W. (Shoreditch &amp; F'bury)
Ellis, John
Irvine, Sir Arthur (Edge Hill)


Buchan, Norman
English, Michael
Jackson, Colin (B'h'se &amp; Spenb'gh)


Buchanan, Richard (G'gow, Sp'burn)
Ennals, David
Jay, Rt. Hn. Douglas


Butler, Herbert (Hackney, C.)
Ensor, David
Jeger, Mrs. Lena (H'b'n &amp; St. P'cras, S.)


Callaghan, Rt. Hn. James
Evans, Fred (Caerphilly)
Jenkins, Rt. Hn. Roy (Stechford)


Carmichael, Neil
Evans, Ioan L. (Birm'h'm, Yardley)
Johnson, Carol (Lewisham, S.)


Carter-Jones, Lewis
Finch, Harold
Johnson, James (K'ston-on-Hull, W.)


Chapman, Donald
Fitch, Alan (Wigan)
Jones, Dan (Burnley)


Conlan, Bernard
Fletcher, Ted (Darlington)
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)


Craddock, George (Bradford, S.)
Foot, Michael (Ebbw Vale)
Jones, J. Idwal (Wrexham)


Crawshaw, Richard
Ford, Ben
Jones, T. Alec (Rhondda, West)




Judd, Frank







Kenyon, Clifford
Mitchell, R. C. (S'th'pton, Test)
Ryan, John


Kerr, Mrs. Anne (R'ter &amp; Chatham)
Molloy, William
Shaw, Arnold (Ilford, S.)


Kerr, Russell (Feltham)
Moonman, Eric
Sheldon, Robert


Lawler, Wallace
Morgan, Elystan (Cardiganshire)
Shore, Rt. Hn. Peter (Stepney)


Lawson, George
Morris, Alfred (Wythenshawe)
Short, Mrs. Renée (W'hampton, N.E.)


Leadbitter, Ted
Morris, Charles R. (Openshaw)
Silkin, Rt. Hn. John (Deptford)


Lee, Rt. Hn. Jennie (Cannock)
Morris, John (Aberavon)
Silkin, Hn. S. C. (Dulwich)


Lee, John (Reading)
Moyle, Roland
Silverman, Julius


Lever, Rt. Hn. Harold (Cheetham)
Murray, Albert
Skeffington, Arthur


Lewis, Arthur (W. Ham, N.)
Newens, Stan
Slater, Joseph


Lewis, Ron (Carlisle)
Noel-Baker, Rt. Hn. Philip
Small, William


Lipton, Marcus
Oakes, Gordon
Spriggs, Leslie


Loughlin, Charles
O'Malley, Brian
Steel, David (Roxburgh)


Lyon, Alexander W. (York)
Oram, Albert E.
Steele, Thomas (Dunbartonshire, W.)


Mabon, Dr. J. Dickson

Summerskill, Hn. Dr. Shirley


McBride, Neil
Orbach, Maurice
Taverne, Dick


McCann, John
Orme, Stanley
Tinn, James


MacColl, James
Oswald, Thomas
Tuck, Raphael


Macdonald, A. H.
Owen, Dr. David (Plymouth, S'tn)
Urwin, T. W.


McGuire, Michael
Owen, Will (Morpeth)
Varley, Eric G.


McKay, Mrs. Margaret
Page, Derek (King's Lynn)
Wainwright, Richard (Colne Valley)


Mackenzie, Alasdair (Ross &amp; Crom'ty)
Palmer, Arthur
Wallace, George


Mackenzie Gregor (Rutherglen)
Park, Trevor
Watkins, David (Consett)


Mackie, John
Parker, John (Dagenham)
Watkins, Tudor (Brecon &amp; Radnor)


Mackintosh, John P.
Parkyn, Brian (Bedford)
Wellbeloved, James


Maclennan, Robert
Pearson, Arthur (Pontypridd)
Whitaker, Ben


McMillan, Tom (Glasgow, C.)
Peart, Rt. Hn. Fred
Whitlock, William


McNamara, J. Kevin
Pentland, Norman
Wilkins, W. A.


Mahon, Peter (Preston, S.)
Perry, Ernest G. (Battersea, S.)
Willey, Rt. Hn. Frederick


Mahon, Simon (Bootle)
Perry, George H. (Nottingham, S.)
Williams, Alan (Swansea, W.)


Mallalieu, E. L. (Brigg)
Price, Christopher (Perry Barr)
Williams, Alan Lee (Hornchurch)


Mallalieu, J. P. W. (Huddersfield, E.)
Price, Thomas (Westhoughton)
Williams, Clifford (Abertillery)


Manuel, Archie
Price, William (Rugby)
Williams, Mrs. Shirley, (Hitchin)


Mapp, Charles
Probert, Arthur
Willis, Rt. Hn. George


Marks, Kenneth
Rankin, John
Wilson, William (Coventry, S.)


Marquand, David
Rees, Merlyn
Winstanley, Dr. M. P.


Marsh, Rt. Hn. Richard
Roberts, Albert (Normanton)
Woodburn, Rt. Hn. A.


Mason, Rt. Hn. Roy
Roberts, Rt. Hn. Goronwy
Woof, Robert


Maxwell, Robert
Roberts, Gwilym (Bedfordshire, S.)
Wyatt, Woodrow


Mellish, Rt. Hn. Robert
Rodgers, William (Stockton)



Mendelson, John
Roebuck, Roy
TELLERS FOR THE NOES:


Mikardo, Ian
Rogers, George (Kensington, N.)
Mr. J. D. Concannon and Mr. Charles Grey.


Miller, Dr. M. S.
Rose, Paul



Milne, Edward (Blyth)
Ross, Rt. Hn. William

Amendments made: No. 13, in page 10, line 16, leave out 'a' and insert 'an ordinary'.

No. 14, in line 17, leave out 'a' and insert an ordinary'.

No. 15, in line 18, at end insert:
(8) A holiday season licence shall be granted only for premises as to which the Commissioners are satisfied that they will, on the date on which the licence is first in force, have local authority approval under the Gaming Acts by virtue of paragraph 5 or 6 of Schedule 11 to this Act; and—
(a) the licence shall be one which authorises the provision only of penny machines up to a number specified in the licence; and
(b) the duty on the licence shall be £15 multiplied by that number.—[Mr. Harold Lever.]

10.15 p.m.

Mr. Harold Lever: I beg to move Amendment No. 16, in page 10, line 23, leave out from beginning to 'machine' and insert:
(a) in the case of a penny machine, shall be treated for the purposes of a holiday season licence as a number of penny machines equal to the number of persons who can play the machine simultaneously;
(b) in the case of a penny machine or any other.

Mr. Speaker: It will be convenient if we also discuss with this the sub-Amendment to Amendment No. 16, after 'to', in paragraph (a), insert `one quarter of'.

Mr. Lever: It will also be convenient if we take Government Amendments Nos. 17 and 18.
This Amendment deals with multiple penny machines and it makes consequential changes in the subsection dealing with multiple machines generally. For the purposes of the holiday season licence—[Interruption.]— multiple penny-play machines are treated as the number of penny machines equal to the number of playing positions.

Mr. Speaker: Order. Only one Member can be on his feet at once in the House.

Mr. Lever: For the purpose of a holiday season licence multiple penny play machines are treated as the number of penny play machines equal to the number of playing positions, while for the purpose of an ordinary licence they are

treated as the number of "lower rate" machines equal to the number of playing positions.

Mr. Rees-Davies: I hope that the Minister will now take a little time to consider what he has to say about this, because it is of fundamental importance to the trade. It is the one remaining matter about which I have already seen him. We must have this explicit. The position is that the Government are asking the House to say with that where the penny machine is a multi-player, that is to say, a Derby racer or one of those machines upon which a great many people may be invited to participate, we shall multiply what is received by way of tax by the number of those persons who can play the machine simultaneously.
The Amendment we have proposed after considerable discussion with all those engaged in the trade suggests that it would be reasonable to apply a tax based on a ratio of one-quarter of the total positions for play. It would be one-quarter of the total number of positions for play.
Let me explain what this means. There were one or two misconceptions in Committee. May I tell the Financial Secretary that only four machines were ever made which could take 40 players? None of those is now in use, so that we can get rid of that. In Committee the right hon. Gentleman was saying, understandably, that he thought that if there could be 40 players in a place there must be a good measure of profit and he was no doubt thinking that there would be some expensive machines. I produced one or two, the Derby racer, the vintage car and others.
We have to get the full picture. At the seaside these are put in because they are extremely attractive. They are there largely so that people can move in and watch them. In most cases they have a small area for play. A Vintage Racer machine might have 15 official positions but the number of people playing at any one time is normally between four and six. Therefore, only a small proportion of machines which have 15 or 20 positions for play are operated at any one time. It is wholly inequitable to charge 20 times the amount merely because there are 20 position for play.
I illustrated the matter in this way. In this House there are a number of positions for play. There are not enough positions for 600 Members to play at one and the same time. The House of Commons is designed to give sympathetic consideration to the fact that when there are 100 to 150 Members present it looks full. The whole idea of this type of machine is to encourage this sense of ambience or fulfilment of many people standing around, but they are not playing. Therefore, we do not get the number of players which the machine prescribes.
I have had the opportunity to show the Financial Secretary some of the attractive drawings of vintage car machines. I shall refer briefly to one, namely, the vintage car race, similar to the Derby racer. It is a 20 player machine. It has a length of only 9 ft. 9 in. One would be far from cosy if more than 10 people were playing. The duty, if this proposal goes through, will be £300 per annum. The price is £2,780, and it has been estimated that more than one-third of the takings of the machine would go straight to the Government. Some figures which I have extracted from one company show that the takings on their machines, which they loan, were only £46 per machine.
As the figures are not generally known, the Government may like to have the number of multi-player machines with which they are substantially concerned. There are about 1,000 machines with an average of eight player positions per machine. The Government say that they want to take £120,000 tax on these multi-player machines alone. We say that £30,000 would be more than sufficient if the machines are to continue. They are entirely harmless. Children use them every day. They return tiny prizes. People put in their pennies purely as a harmless flutter for fun. Nobody thought that they would be taxed. If the tax is based on the number of players—15 or 20 players, £15 per player, about £300 tax—they will cease.
These machines are made in this country, which is an import saving. They are exported in large numbers. Purchase tax of 36⅔ per cent. is paid on them. Surely it is unwise to deprive the Government of the revenue and people of the pleasure of them. All

that we have to do is to find the right multiple. We have suggested dividing by four. The Government must divide by something, otherwise they will divide their own revenue.

Dame Irene Ward: It would be helpful to have a definition by the Financial Secretary of what he means by "holiday seasons". Who is talking about holidays—

Mr. Speaker: Order. With respect, the hon. Lady is on the wrong Amendment. We have disposed of Amendment No. 15, and we are now discussing the tax on the multi-player machine.

Dame Irene Ward: The Financial Secretary talked about the holiday season multiple player, or whatever it is called, so I think that it would be helpful if he were to tell us for how long the multiple players are played. My part of the world has a much shorter holiday season for the operation of these machines than, perhaps, is the case in the constituency of my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies). This provision could be even more unfair to a part of the world with a short holiday season than the one with a longer season. That being the case, perhaps we may know what we mean when we talk of the "holiday season".

Sir S. McAdden: It is very clear from the Government Amendment that the season about which my hon. Friend the Member for Tynemouth (Dame Irene Ward) asks is the period from 1st March to 31st October. Though that may not seem to be a holiday time, it is to that period that the provision refers.
I can understand the kind of thinking going on behind the Government's action. They say, "If we tax a machine with one slot at a rate of £15, the tax on a machine with 20 slots should be 20 times as much". That reasoning is based on the assumption that a machine of 20 slots will take 20 times as much money as will a machine with one slot only, but that, if I may say so without offence, shows a lamentable ignorance of what goes on in amusement arcades. It just is not true that the machine with 20 slots takes as much money as the machine with one slot. The machine operators would


be delighted if it were so, but such is not the case.
Very largely, these are what are described as "flash" machines. They occupy a certain amount of space, and they attract people. A machine with 20 slots will often have no more than six to ten people playing at one time. That is why our Amendment is designed to reduce the Government's figure by some number or other. We do not say that ours is necessarily the right figure, but we certainly say that 100 per cent. tax on every single slot is not the right way to go about things. We therefore hope that the right hon. Gentleman will bend his mind to forming some different kind of judgment. If the proper tax is not one-quarter of that proposed, it might be one levied on half of the available position. At any rate, let us not tax these people on every playing position, because to do so is grossly unjust.

Mr. A. P. Costain: Our seaside resorts find some sort of wet weather entertainment necessary to encourage people to visit them, and these arcades make some contribution of that kind. Multi-slot machines give amusement to more people than those who play. They are an attraction and a useful adjunct. If the Chancellor of the Exchequer goes ahead with his present proposal these machines will not be viable, and will have to be removed. The figures involved are not very great, and I appeal to the right hon. Gentleman to see whether he cannot make some contribution to keeping the machines in operation.

Mr. Robert Cooke: I have seen a large number of these multi-slot machines in operation in holiday resorts and in my constituency. I have never seen all the slots in play at the same time.

Mr. Harold Lever: I am deeply indebted to the fund of experience contributed by different hon. Members to this debate. I am sure that it will be very helpful, although I must confess that the relation of the functions of the multi-provision machine to hon. Member's positions in the Chambers by the hon. Gentleman the Member for the Isle of Thanet (Mr. Rees-Davies) did not seem to be altogether compelling. At all events, he must explain it to me in greater detail outside the Chamber.

Mr. Robert Cooke: Only one slot works at once.

Mr. Lever: No fiscal arrangements of the players have yet been evolved by the Chancellor to keep the number of players to a practical minimum at appropriate times.
10.30 p.m.
I hope that the hon. Lady the Member for Tynemouth (Dame Irene Ward) is now satisfied with the holiday season definition.

Dame Irene Ward: I think it a silly one.

Mr. Lever: I can only try to please the hon. Lady and her constituents by making the holiday season cover a period from March to the end of October, which I thought would cover the whole range of Whitley Bay excitements and possibilities. If I have not gone far enough I regret it.
I say this reassuringly on the multi-player position. We are not imposing the duty on the number of penny slots but on the number of playing positions. I assure hon. Members that the Customs and Excise will look at machines literally individually to assess fairly what are the number of playing positions so that we get a realistic approximation in the duty paid to what the machine is expected to take.

Mr. Rees-Davies: The Department cannot do this horse-trading because the player positions are marked on the machines. Therefore presumably this will be tied to the number set out in the specification. This is the difficulty which Customs and Excise will find unless some criteria is laid down.

Mr. Lever: The hon. Member is underestimating the capabilities of the Customs. If positions are defined three inches apart, no 40 human beings could play. I am sure that the Customs will be able to decide the number of playing positions. That is more reasonable than having a hypothetical number of three, four or whatever is suggested. No one wants to tax these machines unfairly. They will be taxed on the number of playing positions, not the number of slots or necessarily on theoretical playing positions indicated by white lines. Each machine will be examined and assessed by the number of playing positions.

Mr. Rees-Davies: The right hon. Gentleman has not dealt with the other point. He recognises, I am sure, that not more than half the possible number will be playing at any one time simultaneously except in the rarest circumstances. It cannot be right to consider this on the number of possible players. That factor must be reduced.

Mr. Lever: That is true of all other machines. They are not in continuous operation all the time. They are intermittently employed and they are taxed at £15 for a holiday season licence even if used only intermittently.

Amendment agreed to.

Further Amendments made: No. 17, in page 10, line 26, after 'treated', insert:
'for the purposes of an ordinary licence'.

No. 18, in line 30, leave out from beginning to 'as' and insert:
'in a case not falling within paragraph (b) of this subsection, shall be treated for the purposes of an ordinary licence'.—[Mr. Harold Lever.]

Mr. Harold Lever: I beg to move Amendment No. 19, in line 39, at end insert:
'and for the temporary exemption of certain premises where only penny machines are provided'.
This places a new provision in the Schedule exempting from gaming machines licence duty from October 1969 on premises which satisfy the conditions relating to holiday season licences.

Mr. Rees-Davies: Why not all the machines this year? It is to be October 1969. What are they to do in Blackpool and the Isle of Thanet throughout the month of October, 1969? What are they to do in the seaside resorts this year merely because the Government were so incompetent that they did not originally fix it at the end of October instead of at the beginning? Anybody who knows anything about the hotel industry must know that if a new tax is to be introduced it should not be done before the season is over. It is reasonable to say that the Government might have introduced this tax on 31st October instead of on 1st October. The Government are making a concession to the holiday season licence, but nobody will want a licence for one or two weeks in October. The occasional conference, with which

the House is not infrequently concerned, takes place in some parts into the first few days of October.
I invite the Chancellor to do what Lord Butler, as he now is, used to do on these occasions—to go to the Box and say, "Surely we can make this concession". This should be started fair and square at the end of the season, at the end of October. It is not sufficient to apply this concession to some people only. Why cannot we wrap this paraphernalia up and start fair and square? It would help, not so much my constituency, but those in the North and elsewhere who have to bear in mind the position of continuing some sort of trade in October and who could not pay these heavy licence fees for a short period.

Mr. Harold Lever: I cannot grant this concession except to those enjoying the concession on the basis I have already outlined of the holiday licence.

Amendment agreed to.

Further Amendments made: No. 20, in page 11, line 4, leave out 'a gaming machine' and insert 'an ordinary'.

No. 21, in line 9, leave out 'and'.

No. 22, in line 10, leave out 'such a' and insert ' an ordinary'.—[Mr. Harold Lever.]

Mr. Harold Lever: I beg to move Amendment No. 23, in page 11, line 15, at end insert
'and
(d) at any time when a holiday season licence is in force in respect of any such premises, gaming machines shall not be provided for gaming on those premises except penny machines up to the number specified in the licence'.
This is to make the holiday season licence effective. It makes it an offence for gaming machines other than penny machines up to the number authorised by the licence to be provided for gaming on premises covered by a holiday season licence.

Amendment agreed to.

Schedule 11

PROVISIONS RELATING TO GAMING MACHINE LICENCE DUTY

Mr. Harold Lever: I beg to move Amendment No. 93, in page 97, line 10, at end insert:
10A. During the month of October, 1969, a gaming machine licence shall not be required


in order to authorise the provision on premises of gaming machines at any time when there are on those premises no such machines other than penny machines; but this exemption applies to premises only at a time when they have local authority approval under the Gaming Acts by virtue of paragraph 5 or 6 of this Schedule.

Mr. Speaker: With this Amendment the House is taking the sub-Amendment, in line 3, leave out:
'penny machines; but this exemption applies to premises only at a time when they'
and insert:
'machines upon premises which'.

Mr. Lever: This Amendment adds a new paragraph to the Schedule exempting premises which satisfy the conditions relating to holiday season licences from duty during October, 1969: without this, sites which will enjoy the holiday season concession in future years would need a licence to operate during the last few days of this year's holiday season.

Amendment agreed to.

Further Amendments made: No. 94, in page 97, line 28, leave out 'a gaming machine' and insert 'an ordinary'.

No. 95, in line 32, leave out from 'the' to 'licence' in line 34 and insert:
'date on which the licence is to be in force; and, in the case of an ordinary'.

No. 96, in line 36, at end insert:
(2) An application for a holiday season licence in respect of any premises shall be made not less than fourteen days before the date on which the licence is to be first in force.

No. 97, in page 97, line 41, leave out 'A' and insert 'An ordinary'.

No. 98, in page 97, line 42, leave out 'a' and insert 'an ordinary'.—[Mr. Harold Lever.]

Mr. Harold Lever: I beg to move Amendment No. 99, in page 97, line 44, at end insert:
(3) A holiday season licence shall expire at the end of 31st October next after the date on which it is expressed to take effect.
(4) If a holiday season licence is granted in respect of any premises, any ordinary licence in respect of those premises shall (if not surrendered under paragraph 17 of this Schedule) become void as from the day on which the holiday season licence is first in force.
(5) If an ordinary licence (whole-year or half-year) is granted in respect of any premises, any holiday season licence in respect of those premises shall become void as from the day on which the ordinary licence is first in force.

This deals with the expiry of holiday licences. It is purely consequential.

Amendment agreed to.

Further Amendment made: No. 100, in page 98, line 17, leave out 'A' and insert 'An ordinary'.—[Mr. Harold Lever.]

Mr. Harold Lever: I beg to move Amendment No. 101, in page 98, line 27, at end insert:
(3) A holiday season licence may be amended under this paragraph so as to increase the number of penny machines which are authorised by the licence for the premises in question.
This Amendment and Nos. 102, 103, 104, 105 and 106 govern minor administrative conveniences in the administration of the holiday licence.

Amendment agreed to.

Further Amendment made: No. 102, in page 98, line 37, leave out 'a' and insert 'an ordinary'.—[Mr. Harold Lever.]

Mr. Harold Lever: I beg to move Amendment No. 271, in page 99, line 5, at end insert:

Existing supply agreements

16A.—(1) The following provisions of this paragraph shall have effect where a person (called 'the hirer') has, before 1st October 1969, entered into an agreement with another person (called 'the supplier') for the provision by the supplier on any premises of a gaming machine during a period beginning before, and extending beyond, that date.

(2) If the consideration for the provision of the gaming machine was determined on the assumption that someone other than the hirer would pay the duty on any gaming machine licence required for the premise; under section 14 of the Finance Act 1966, and the hirer has paid, or will be accountable for, the corresponding duty under section 5 of this Act, the hirer shall be entitled to recover from the supplier such amount, or to make such reduction in periodical payments due from him under the agreement, as may be agreed between them (or, in default of agreement, as may be determined by the appropriate court) to be fair in all the circumstances having regard in particular—

(a) to the period for which, under the agreement, the supplier is to provide a gaming machine as aforesaid on the premises in question; and
(b) to the incidence of the duty under the said section 14 and section 5 as respects that period.

(3) In the last foregoing sub-paragraph, 'the appropriate court' means—
(a) where the premises in question are in England or Wales, the county court; and


(b) where the said premises are in Scotland, the sheriff.

Mr. Patrick Jenkin: The Financial Secretary should offer some explanation of an entirely new paragraph in the Schedule.

Mr. Lever: I beg the pardon of the House. Perhaps I should give the reason for the Amendment.
The Amendment has been sought by the Working Men's Club and Institute Union Ltd., which raised the matter at a late stage. Working men's clubs commonly hire machines from firms of suppliers, and some clubs have entered into long-term agreements providing for the payment of a hiring charge at a rate which includes an element in respect of the existing gaming machine licence duty, under the Finance Act 1966, but without specifically saying so. Though the matter has not been raised by other clubs, it seems likely that some of them will have similar contracts.
The agreements in question commonly provide for the payment of a monthly rental with no provision for amending it in changed circumstances. Under the Finance Act 1966, the licence duty, of £75 per year per machine, is paid by the supplier. Under the provisions of the present Bill, the duty may be paid by one of a number of people, including the supplier and the hirer, though in practice, so far as working men's clubs are concerned, it is likely to be paid by the secretary of the club and will certainly be so paid where the secretary hires two machines from different suppliers. Moreover, since the supplier could hold the club to the terms of its agreement, it would be possible for unscrupulous suppliers to refuse to take out a licence in future, leaving it to the secretary to do so, but without reducing the hiring charge to take that into account. This would be an unfair financial hardship to the club.
The Amendment provides for existing contracts to be varied in the light of the changed circumstances in a way which would be fair to both parties. If the parties cannot agree, the matter is to be determined by the court. A similar provision was included in the Finance Act 1966, when the duty was first introduced.
I hope that that will meet with the approval of the House. It amounts to allowing an appropriate adjustment of agreements to take into account the imposition of the duty, which might have a very odd effect under pre-existing agreements were the right to modification not thus incorporated.

Amendment agreed to.

Further Amendments made: No. 103, in page 99, line 6, leave out 'a' and insert 'an ordinary'.

No. 104, in page 99, line 12, after 'officer 'insert 'either—(a)'.

No. 105, in page 99, line 15, at end insert:
'or
(b) that as from the date of the surrender there will be in force in respect of those premises a holiday season licence'.

No. 106, in page 99, line 37, after second 'rate' insert:
'or. as the case may be, as penny machines'. —[Mr. Harold Lever.]

Clause 6

VEHICLE LICENCES

10.45 p.m.

The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Bob Brown): I beg to move Amendment No. 24, in page 12, line 15, leave out 'subsection' and insert 'subsections'.
I understand that we are considering at the same time Government Amendment No. 25.
Although these Amendments are complex in form, they are comparatively simple in effect. Their object is to make a slight extension of the exemption from vehicle excise duty which is provided in Clause 6(1) to vehicles purchased here by overseas residents. The present provisions of Clause 6(1) deal with the great majority of such vehicles, private cars. When such vehicles are purchased here by overseas residents, purchase tax can be remitted by the Customs under Section 23 of the Purchase Tax Act, 1963. This, of course, is undoubtedly an incentive to the sale of British cars, and, indeed, some 20,000 cars are sold each year under these arrangements.
As a further incentive, Clause 6(1) exempts these vehicles also from vehicle excise duty. This avoids the troublesome


business for foreign visitors of having to take out vehicle excise licences for four or twelve months and then claiming a refund when they leave with the car.
A small number of vehicles—probably no more than 500—purchased by overseas residents are not subject to purchase tax. Examples of the sort of vehicles we have in mind are motorised caravans and personnel carriers of the large Land Rover type. Since Clause 6(1) is related to vehicles on which purchase tax is remitted, the vehicle excise exemption which it provides would not apply to such vehicles. It would be illogical, however, to afford exemption to the larger number—the 20,000 private cars—but not to the 500 or so vehicles I have referred to. I am glad to have the opportunity of moving the Amendment and thus to remove illogicality. Amendment No. 24 is the paving Amendment and No. 25 the substantive.

Mr. Higgins: Is the hon. Gentleman aware that earlier the Government rejected our proposal to remove vehicle licence duty from disabled drivers? Does he think that this is a more deserving case than that? Secondly, is this concession consistent with our obligations under the G.A.T.T.? How many of our foreign competitors are also selling cars to overseas visitors with the same con-session?

Mr. Brown: It is not for me to comment on the earlier Amendment. This Amendment is an incentive to British car exports and I am sure that the hon. Gentleman must be able to differentiate between vehicle excise licences for the disabled and incentives to exports. I was not in the House at the time, but no doubt one of my right hon. Friends gave good reason for not giving the concession proposed in the earlier Amendment.

Dame Irene Ward: Is the hon. Gentleman really saying that it is more important to give this kind of concession for exports than it is for disabled people? That is what he is saying and I do not agree with him.

Mr. Brown: I understand fully the feeling which exists on this sort of matter, but we are not discussing the Amendment relating to disabled persons. I have given an explanation of this

Amendment and I have no doubt that one of my right hon. Friends has given a reasonable explanation for the rejection of the earlier Amendment. It is not for me to give an explanation again.

Mr. Higgins: The hon. Gentleman cannot get away with this. He must put it in the context of the Bill. The Government propose to give a concession here rather than the concession which they earlier rejected. If the hon. Gentleman is to justify it, he must obviously show sound cause on that basis. In any case, he has not answered my question about the G.A.T.T.

Mr. Brown: I apologise to the hon. Gentleman for not answering him about the G.A.T.T. I understand that we are acting in accordance with the agreement to which we are a party.

Mr. Higgins: How many of our foreign competitors make the same concession?

Mr. Brown: Without notice I cannot answer that question, but I will write to the hon. Gentleman. I am sure that hon. Members, on reflection, will concede that it is not relevant whether this Amendment should be accepted.

Mr. Eldon Griffiths: I have only a brief question, but I am not optimistic about getting an answer in the light of the hon. Gentleman's inability to answer my hon. Friend the Member for Worthing (Mr. Higgins). We extend to a large number of diplomatic personnel and members of foreign missions and international organisations such as the International Coffee Board and the International Sugar Organisation, freedom from purchase tax and freedom from tax on vehicles purchased in this country.
There are on the staff of these organisations many people who are not covered by consular conventions or diplomatic treaties—gardeners, au pair girls, child minders, and so on. If these people should purchase vehicles in this country, will they be able to do so without paying tax? This is a straight factual question that deserves a straight factual answer. If the answer is yes, then the case that has been made from the Opposion Front Bench and by my hon. Friend the Member for Tynemouth (Dame Irene Ward) is even more powerful. It cannot


be right that the hangers-on of diplomatic and international missions who are not covered by consular and diplomatic immunities should benefit more than the disabled.

Mr. Arthur Lewis: As I understand it, the object is to encourage people to buy cars by allowing them to run the cars free of tax for twelve months before taking them abroad, and thus to help exports. What action is taken to ensure that this happens? I can assure the Joint Parliamentary Secretary that there are thousands of unlicensed vehicles on the road and neither his Department nor any other Department does anything about it.
I know of a car bought on this basis which has been unlicensed for two years. Although it has been reported the car is still unlicensed and still unexported. The Department says it is a matter for the police. The police say it is a matter for the G.L.C. enforcement officer. The enforcement officer says that there are so many thousands of these cases that he cannot do anything about it.
It takes 18 months or two years before a case can be brought to court, and when it gets to court only a nominal fine of £5 is imposed. If the offender does not want to pay the fine he does not do so. After another two years he might again be fined £5 and may again refuse to pay it. After about five years the police give up, the enforcement officer gives up, and the car is sold to a car dealer. The car dealer then sells the car again to an individual who takes it out on the road knowing that it is not taxed or insured. If that man has a hit-and-run type accident and somebody notices the number and takes the matter up with the Ministry, the Ministry will then say "The car should have been exported".

Mr. Deputy Speaker(Mr. Harry Gourlay): Order. The hon. Gentleman is getting a little wide of the Amendment that is before the House.

Mr. Lewis: I was trying to explain what was now happening, that not only a coach and horses but a hundred-and-one vehicles were being driven through the existing legislation. To what extent have the present abuses, which have been going on for years, been encouraged by the Treasury? Will the Parliamentary Secretary assure me that these people will

not be given further encouragement by the Bill?
I was going on to say, Mr. Gourlay, that people have been dodging the column for years. These cars should have been exported two or three years ago. But has the Ministry taken action? No. The Bill will give further opportunities to people to dodge the column. The Parliamentary Secretary has not said how he can guarantee that these cars will go for export. Is it not possible to ensure that if the cars are not exported within twelve months the whole of the arrears of duty shall be payable, rather than to leave the situation to go on for even more years?

Mr. Bob Brown: As the hon. Member for Bury St. Edmunds (Mr. Eldon Griffiths) said, there are certain concessions to take account of diplomatic arrangements, but the matter of gardeners and au pair girls is a different issue altogether. Anybody who can be identified as a genuine foreign visitor will have the concession, otherwise they will not.
My hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) mentioned certain abuses. I am sorry to say that the matter of the dodging of vehicle excise licence has become almost a mania with my hon. Friend. There can hardly be a car in the West Ham area which he cannot identify quite readily and at will.
We are on this aspect dealing with some 500 vehicles a year. I find it difficult to understand how countless vehicles are running around the country years after purchase, after they should have been exported, without having paid the duty. I cannot understand such an allegation, when we are here talking about only 500 Land Rovers and personnel carriers.
The system under which the vehicles have "no sale" or export restrictions attached to them is a quite distinctive one. It will be extended to the vehicles to which I have referred. This will put prospective purchasers and taxation authorities on their guard against any attempt to evade the conditions of the exemptions.

Sir Gerald Nabarro: I had not intended to intervene until I heard the Joint Parliamentary Secretary deride what was said by the


hon. Member for West Ham, North (Mr. Arthur Lewis), and I rise only to reinforce what he said about the proliferation of licence evasion at every level—

Mr. Deputy Speaker: Order. The hon. Gentleman must know that we are on Report and dealing with Amendments 24 and 25, which have nothing to do with general licence evasion. The hon. Gentleman may only deal with evasion which may arise out of the Amendments.

Sir G. Nabarro: I will come to that. I had just referred to the proliferation of licence evasion at every level. The Joint Parliamentary Secretary will recall that I sent him last week an example of the kind of evasion about which the hon. Member for West Ham, North complains. If the Minister cannot stop evasion of that kind, which concerns citizens of this country, how does he propose to stop evasion where vehicles are purported to have been bought for export, which is immeasurably more difficult than apprehending evasion in this country? It is reckoned that there are more than a million unlicensed vehicles running round our roads—

Mr. Deputy Speaker: Order. I have ruled already that in touching on that aspect of licence evasion the hon. Gentleman is out of order. Perhaps he will address his remarks specifically to the Amendment.

Sir G. Nabarro: I will finish my sentence. It is estimated that there are more than a million unlicensed vehicles running round our roads, including vehicles which are supposed to be en route to export markets. The fact is that neither the Ministry's officials, nor the licensing authorities, nor the police are in a position to apprehend the offenders. The police take no notice of complaints—

Mr. Deputy Speaker: Order. The hon. Gentleman is disregarding the Ruling of the Chair. Perhaps he will address his remarks specifically to the Amendment.

Sir G. Nabarro: I am endeavouring to do that, and I intend to go on making this speech, attaching my remarks to the Amendment.
If the police are not in a position to apprehend the widespread evasion with motor cars in this country, how can they apprehend motor vehicles which are pur-

ported to be en route to export markets but which are not exported?
I want the Joint Parliamentary Secretary to answer this specific question. Has he read the letter which I wrote him last week—

Mr. Deputy Speaker: Order. As I understand the hon. Gentleman's submission, the letter has nothing to do with the Amendment, and therefore I cannot allow him to speak further on that.

Sir G. Nabarro: I am sorry you have not read the letter, Mr. Deputy Speaker.

Mr. Deputy Speaker: I may not have read the letter, but I have been listening to the hon. Gentleman. I gather from his remarks that the letter does not deal with cars which are covered by the Amendment.

Sir G. Nabarro: I am asking the hon. Gentleman whether he has read the letter, because when he replies to the debate I hope he will tell me whether the cars were en route to export markets. That is the point.
In this case, a dealer in Reading was forced to recover nine vehicles on account of the non-payment of sums due under hire-purchase contracts. Of the nine vehicles, seven had not been taxed. Were they export vehicles? I doubt it.

An Hon. Member: Come off it.

Sir G. Nabarro: I will not come off it. We are being taxed at the rate of £25 a year as perfectly legal car drivers because of the amount of evasion which occurs at present.
I hope that the Joint Parliamentary Secretary will not deride the hon. Member for West Ham, North, because he is exactly right and the Minister is exactly wrong. He ought to find out what is the extent of evasion, both in respect of vehicles purchased and said to be for export but not subsequently exported, and in respect of those purchased for use in this country and not licensed. The two are parallel problems, resulting in a huge loss of revenue and the legitimate licence owner being taxed more heavily than otherwise he need be.

Mr. Patrick Jenkin: We recognise the value when Ministers from Departments other than the Treasury come down to the House to take part in debates on the


Finance Bill on matters that primarily concern the interests of their Department. But the House is entitled to expect that when Ministers from other Departments come down they should be able to answer the questions put to them from both sides.
It is not good enough for the Parliamentary Secretary, in answer to my hon. Friend the Member for Worthing (Mr. Higgins), to say that something is nothing to do with him. The hon. Gentleman is a member of the Government. When he stands at the Dispatch Box answering a debate on an Amendment of this kind he is answering for the Government, and he has as much responsibility as any other member of the Government who speaks on the Finance Bill. The Parliamentary Secretary has delivered himself of a series of deplorably inadequate replies to the questions that have been put from both sides.
The hon. Gentleman was asked how this concession was justifiable when the concession which the Government turned down earlier in relation to disabled drivers was not felt to be justifiable. He merely said that it was nothing to do with him.
He was asked whether it was in accordance with our obligations under G.A.T.T. All that he could say was that he had no reason to believe that it was not. He said that it was an export incentive. This is not an indirect tax which is allowed to be relieved under G.A.T.T. He was asked what other countries gave comparable relief in the export of cars from their territories. He had no idea of any other country that gave this relief.
The Parliamentary Secretary appeared to be supremely complacent when faced with the evidence put to him by his hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) about the use of this concession by those who wished to evade road tax. This is not good enough.
We recognise that the Clause and the Amendment are both, in their way, concessions intended to help exports. But I believe that the House is entitled to mark its disapproval of a Minister who

Division No. 333.]
AYES
[11.9 p.m.


Abse, Leo
Anderson, Donald
Atkins, Ronald (Preston, N.)


Allaun, Frank (Salford, E.)
Archer, Peter
Atkinson, Norman (Tottenham)


Alldritt, Walter
Ashley, Jack
Barnett, Joel

comes down and delivers himself of such inadequate answers by pressing the matter to a Division. I hope that my right hon. and hon. Friends will join me in dividing against the Government's Amendment.

Mr. Bob Brown: I find it hard to take from the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin)— [Interruption.] With the leave of the House—

Mr. Deputy Speaker: Order. I remind the House that the mover of an Amendment on Report does not require the leave of the House to speak more than once.

Mr. Brown: Thank you, Mr. Deputy Speaker. I thought that I was in order.
I find it hard to take from the hon. Member for Wanstead and Woodford his talk about inadequate replies. The replies that he is beefing about have, in the main, been in response to an earlier Amendment which I have said that one or other of my right hon. Friends has already adequately dealt with.
Concerning the remarks of the hon. Member for Worcestershire, South (Sir G. Nabarro), bearing in mind what has gone before, particularly the Budget statement of my right hon. Friend the Chancellor of the Exchequer, I should think that he might have said his last word on vehicle excise duties.

Sir G. Nabarro: rose—

Mr. Brown: No. I have already given way sufficiently.
We are not discussing vehicle excise duties; we are discussing a concession affecting about 500 vehicles per year. We are introducing this Amendment after discussion with the Society of Motor Manufacturers and Traders, whose members are keen to have it to improve their sales. Therefore, I am surprised that the Opposition should see fit to divide on it.

Question put, That the Amendment be made:—

The House divided: Ayes 226, Noes 170.

Baxter, William
Griffiths, Eddie (Brightside)
Morris, John (Aberavon)


Beaney, Alan
Griffiths, Will (Exchange)
Moyle, Roland


Bence, Cyril
Hamilton, James (Bothwell)
Murray, Albert


Benn, Rt. Hn. Anthony Wedgwood
Hamilton, William (Fife, W.)
Newens, Stan


Bidwell, Sydney
Harper, Joseph
Noel-Baker, Rt. Hn. Philip


Binns, John
Harrison, Walter (Wakefield)
Nott, John


Bishop, E. S.
Haseldine, Norman
Oakes, Gordon


Blackburn, F.
Hazell, Bert
Ogden, Eric


Blenkinsop, Arthur
Healey, Rt. Hn. Denis
O'Malley, Brian


Boardman, H. (Leigh)
Heffer, Eric S.
Oram, Albert E.


Booth, Albert
Henig, Stanley
Orbach, Maurice


Boston, Terence
Hooley, Frank
Orme, Stanley


Boyden, James
Houghton, Rt. Hn. Douglas
Oswald, Thomas


Bradley, Tom
Howarth, Robert (Bolton, E.)
Owen, Dr. David (Plymouth, S'tn)


Bray, Dr. Jeremy
Howell, Denis (Small Heath)
Page, Derek (King's Lynn)


Brooks, Edwin
Hoy, Rt. Hn. James
Palmer, Arthur


Brown, Hugh D. (G'gow, Provan)
Hughes, Rt. Hn. Cledwyn (Anglesey)
Parker, John (Dagenham)


Brown, Bob (N'c'tle-upon-Tyne, W.)
Hughes, Roy (Newport)
Parkyn, Brian (Bedford)


Brown, R. W. (Shoreditch &amp; F'bury)
Hunter, Adam
Pavitt, Laurence


Buchan, Norman
Jackson, Colin (B'h'se &amp; Spenb'gh)
Pearson, Arthur (Pontypridd)


Buchanan, Richard (G'gow, Sp'burn)
Jay, Rt. Hn. Douglas
Peart, Rt. Hn. Fred


Butler, Herbert (Hackney, C.)
Jeger, Mrs. Lena (H'b'n&amp;St. P'cras, S.)
Pentland, Norman


Callaghan, Rt. Hn. James
Jenkins, Rt. Hn. Roy (Stechford)
Perry, Ernest G. (Battersea, S.)


Carmichael, Neil
Johnson, Carol (Lewisham, S.)
Perry, George H. (Nottingham, S.)


Carter-Jones, Lewis
Johnson Smith, G. (E. Grinstead)
Price, Christopher (Perry Barr)


Chapman, Donald
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Probert, Arthur


Concannon, J. D.
Jones, T. Alec (Rhondda, West)
Rees, Merlyn


Conlan, Bernard
Judd, Frank
Roberts, Albert (Normanton)


Crawshaw, Richard
Kenyon, Clifford
Roberts, Rt. Hn. Goronwy


Crosland, Rt. Hn. Anthony
Kerr, Mrs. Anne (R'ter &amp; Chatham)
Roberts, Gwilym (Bedfordshire, S.)


Crossman, Rt. Hn. Richard
Kerr, Dr. David (W'worth, Central)
Rodgers, William (Stockton)


Dalyell, Tam
Kerr, Russell (Feltham)
Roebuck, Roy


Davidson, Arthur (Accrington)
Lawson, George
Rose, Paul


Davies, C. Elfed (Rhondda, E.)
Leadbitter, Ted
Ross, Rt. Hn. William


Davies, Dr. Ernest (Stretford)
Lee, Rt. Hn. Jennie (Cannock)
Rowlands, E.


Davies, Rt. Hn. Harold (Leek)
Lee, John (Reading)
Ryan, John


Davies, Ifor (Gower)
Lewis, Arthur (W. Ham, N.)
Shaw, Arnold (Ilford, S.)


de Freitas, Rt. Hn. Sir Geoffrey
Lewis, Ron (Carlisle)
Sheldon, Robert


Dell, Edmund
Lipton, Marcus
Shore, Rt. Hn. Peter (Stepney)


Dempsey, James
Lomas, Kenneth
Short, Mrs. Renée (W'hampton, N.E.)


Dewar, Donald
Loughlin, Charles
Silkin, Rt. Hn. John (Deptford)


Diamond, Rt. Hn. John
Lyon, Alexander W. (York)
Silkin, Hn. S. C. (Dulwich)


Dickens, James
Mabon, Dr. J. Dickson
Silverman, Julius


Dobson, Ray
McBride, Neil
Skeffington, Arthur


Doig, Peter
McCann, John
Slater, Joseph


Driberg, Tom
MacColl, James
Small, William


Dunn, James A.
Macdonald, A. H.
Smith, John (London &amp; W'minster)


Dunnett, Jack
McGuire, Michael
Spriggs, Leslie


Dunwoody, Mrs. Gwyneth (Exeter)
McKay, Mrs. Margaret
Summerskill, Hn. Dr. Shirley


Dunwoody, Dr. John (F'th &amp; C'b'e)
Mackenzie Gregor (Rutherglen)
Taverne, Dick


Eadie, Alex
Mackie, John
Thomson, Rt. Hn. George


Edelman, Maurice
Mackintosh, John P.
Tinn, James


Edwards, Robert (Bilston)
Maclennan, Robert
Urwin, T. W.


Edwards, William (Merioneth)
McMillan, Tom (Glasgow, C.)
Varley, Eric G.


Ellis, John
McNamara, J. Kevin
Wainwright, Edwin (Dearne Valley)


English, Michael
Mahon, Peter (Preston, S.)
Wallace, George


Ennals, David
Mahon, Simon (Bootle)
Watkins, David (Consett)


Ensor, David
Mallalieu, E. L. (Brigg)
Watkins, Tudor (Brecon &amp; Radnor)


Evans, Fred (Caerphilly)
Mallalieu, J.P.W. (Huddersfield, E.)
Wellbeloved, Jamei:


Evans, Ioan L, (Birm'h'm, Yardley)
Manuel, Archie
Whitaker, Ben


Finch, Harold
Mapp, Charles
Whitlock, William


Fitch, Alan (Wigan)
Marks, Kenneth
Willey, Rt. Hn. Frederick


Fletcher, Ted (Darlington)
Marquand, David
Williams, Alan (Swansea, W.)


Foot, Michael (Ebbw Vale)
Marsh, Rt. Hn. Richard
Williams, Alan Lee (Hornchurch)


Ford, Ben
Mason, Rt. Hn. Roy
Williams, Clifford (Abertillery)


Forrester, John
Mellish, Rt. Hn. Robert
Williams, Mrs. Shirley (Hitchin)


Fowler, Gerry
Mendelson, John
Willis, Rt. Hn. George


Fraser, John (Norwood)
Mikardo, Ian
Wilson, William (Coventry, S.)


Freeson, Reginald
Miller, Dr. M. S.
Winnick, David


Gardner, Tony
Milne, Edward (Blyth)
Woof, Robert


Gray, Dr. Hugh (Yarmouth)
Mitchell, R. C. (S'th'pton, Test)



Gregory, Arnold
Molloy, William
TELLERS FOR THE AYES:


Griffiths, David (Bother Valley)
Morris, Alfred (Wythenshawe)
Mr. Ernest Armstrong and



Morris, Charles R. (Openshaw)
Mr. Charles Grey.




NOES


Alison, Michael (Barkston Ash)
Bell, Ronald
Black, Sir Cyril


Allason, James (Hemel Hempstead)
Bennett, Sir Frederic (Torquay)
Blaker, Peter


Astor, John
Bennett, Dr. Reginald (Gos. &amp; Fhm)
Boardman, Tom (Leicester, S.W.)


Atkins, Humphrey (M't'n &amp; M'd'n)
Bessell, Peter
Body, Richard


Awdry, Daniel
Biffen, John
Boyle, Rt. Hn. Sir Edward


Baker, Kenneth (Acton)
Biggs-Davison, John
Braine, Bernard


Baker, W. H. K. (Banff)
Birch, Rt. Hn. Nigel
Brown, Sir Edward (Bath)







Bruce-Gardyne, J.
Hirst, Geoffrey
Percival, Ian


Buchanan-Smith, Alick (Angus, N&amp;M)
Holland, Philip
Pike, Miss Mervyn


Burden, F. A.
Hordern, Peter
Pink, R. Bonner


Campbell, B. (Oldham, W.)
Hornby, Richard
Pounder, Rafton


Carlisle, Mark
Howell, David (Guildford)
Powell, Rt. Hn. J. Enoch


Chataway, Christopher
Hunt, John
Price, David (Eastleigh)


Chichester-Clark, R.
Hutchison, Michael Clark
Prior, J. M. L.


Clark, Henry
Jenkin, Patrick (Woodford)
Pym, Francis


Clegg, Walter
Jones, Arthur (Northants, S.)
Ramsden, Rt. Hn. James


Cooke, Robert
Jopling, Michael
Renton, Rt. Hn. Sir David


Crowder, F. P.
Joseph, Rt. Hn. Sir Keith
Ridsdale, Julian


Cunningham, Sir Knox
Kaberry, Sir Donald
Rossi, Hugh (Hornsey)


Dalkeith, Earl of
Kershaw, Anthony
Royle, Anthony


Dance, James
Kimball, Marcus
Russell, Sir Ronald


Davidson, James (Aberdeenshire, W.)
King, Evelyn (Dorset, S.)
Scott, Nicholas


d'Avigdor-Gotdsmid, Sir Henry
Kirk, Peter
Scott-Hopkins, James


Dean, Paul
Kitson, Timothy
Sharples, Richard


Deedes, Rt. Hn. W. F. (Ashford)
Knight, Mrs. Jill
Shaw, Michael (Sc'b'gh &amp; Whitby)


Drayson, G. B.
Lancaster, Col. C. G.
Silvester, Frederick


du Cann, Rt. Hn. Edward
Lane, David
Smith, Dudley (W'wick &amp; L'mington)


Elliott, R.W.(N'c'tle-upon-Tyne, N.)
Lawler, Wallace
Stainton, Keith


Eyre, Reginald
Legge-Bourke, Sir Harry
Steel, David (Roxburgh)


Farr, John
Longden, Gilbert
Stodart, Anthony


Fletcher-Cooke, Charles
Lubbock, Eric
Stoddart-Scott, Col. Sir M.


Fortescue, Tim
McAdden, Sir Stephen
Taylor, Sir Charles (Eastbourne)


Foster, Sir John
MacArthur, Ian
Taylor, Edward M.(G'gow, Cathcart)


Fraser, Rt. Hn. Hugh (St'fford &amp; Stone)
Mackenzie, Alasdair (Ross&amp;Crom'ty)
Taylor, Frank (Moss Side)


Gibson-Watt, David
Maclean, Sir Fitzroy
Temple, John M.


Gilmour, Sir John (Fife, E.)
Macleod, Rt. Hn. Iain
Tilney, John


Glover, Sir Douglas
McNair-Wilson, Michael
Turton, Rt. Hn. R. H.


Glyn, Sir Richard
Maddan, Martin
van Straubenzee, W. R.


Godber, Rt. Hn. J. B.
Maginnis, John E.
Vaughan-Morgan, Rt. Hn. Sir John


Goodhart, Philip
Marten, Neil
Vickers, Dame Joan


Goodhew, Victor
Maude, Angus
Waddington, David


Gower, Raymond
Mawby, Ray
Wainwright, Richard (Colne Valley)


Grant, Anthony
Maxwell-Hyslop, R. J.
Ward, Dame Irene


Gresham Cooke, R.
Mills, Peter (Torrington)
Wells, John (Maidstone)


Grieve, Percy
Mills, Stratton (Belfast, N.)
Whitelaw, Rt. Hn. William


Griffiths, Eldon (Bury St. Edmunds)
Miscampbell, Norman
Wiggin, A. W.


Gurden, Harold
Mitchell, David (Basingstoke)
Williams, Donald (Dudley)


Hall, John (Wycombe)
Montgomery, Fergus
Wilson, Geoffrey (Truro)


Hall-Davis, A. G. F.
More, Jasper
Winstanley, Dr. M. P.


Hamilton, Lord (Fermanagh)
Morgan-Giles, Rear-Adm.
Wolrige-Gordon, Patrick


Harvey, Sir Arthur Vere
Morrison, Charles (Devizes)
Woodnutt, Mark


Hastings, Stephen
Mott-Radclyffe, Sir Charles
Worsley, Marcus


Hawkins, Paul
Munro-Lucas-Tooth, Sir Hugh
Wright, Esmond


Heald, Rt. Hn. Sir Lionel
Nabarro, Sir Gerald



Heseltine, Michael
Onslow, Cranley
TELLERS FOR THE NOES:


Higgins, Terence L.
Orr-Ewing, Sir Ian



Hiley, Joseph
Osborn, John (Hallam)
Mr. Hector Monro and


Hill, J. E. B.
Page, Graham (Crosby)
Mr. Bernard Weatherill.



Peel, John

Further Amendment made: No. 25, in page 12, line 25, leave out from '9' to end of line 26 and insert:
'then the provisions of subsection (2C) of this section shall apply in relation to that vehicle.
(2B) Where in the case of any mechanically propelled vehicle it is shown to the satisfaction of the authority with whom the vehicle is registered—
(a) that the vehicle is not chargeable with purchase tax; and
(b) that the vehicle is being acquired from a person who is for the time being registered as a manufacturer of such vehicles by the Minister and who is the manufacturer of the vehicle for the purposes of that register; and
(c) that the person so acquiring the vehicle would fall to be treated as an overseas resident for the purposes of the said section 23,
that authority may exempt the vehicle from duty under this Act for a period of twelve months subject to specified conditions, being such conditions as the Minister may from

time to time think necessary for the protection of the revenue; but if at any time during those twelve months any of the conditions subject to which the exemption is granted is not complied with, the provisions of subsection (2C) of this section shall apply in relation to the vehicle.
(2C) Where under subsection (2A) or (2B) of this section the provisions of this subsection are to apply in relation to a vehicle, the vehicle shall be deemed never to have been exempted from duty under the said subsection (2A) or (2B)'.—[Mr. Harold Lever.]

Mr. Deputy Speaker: We now come to Amendment No. 27.

Mr. John Smith: On a point of order. May I draw your attention to Amendment No. 296, which is supported by hon. Members from both the Liberal and Tory Parties. It is the only Amendment to Clause 9, and unless it is debated, since the Committee stage was


taken upstairs, the House will have had no opportunity—

Mr. Deputy Speaker: Order. I cannot hear anything further on that point of order, since the selection of Amendments is a matter for Mr. Speaker, and the Amendment has not been selected for debate.

Clause 10

ALTERATIONS OF PERSONAL RELIEFS

Mr. Michael Shaw: I beg to move Amendment No. 27, in page 15, line 20, at end insert:
(9) In section 214 of the Income Tax Act, 1952 after 'he has employed some other female person for the purpose' there shall be inserted 'whether or not she is resident with him'.
Section 214 deals with an allowance given in certain circumstances in respect of a person taking charge of a widower's or widow's children, or acting as his or her housekeeper. The term "housekeeper's allowance" has become well known, and is used not only in this Section but elsewhere.
I concede that in wording my Amendment as I have I have dealt with a point that only partially covers the question of housekeeper's allowance. I have done so deliberately, because I am dealing only with the allowance relating to a housekeeper employed by the taxpayer, and not with the case where a female relative is acting as housekeeper. However, I believe that if my argument is accepted the case of others acting as housekeepers will be accepted as well, because the arguments are very similar.
On the whole, however, the point I have selected is the most appealing. Where a claimant proves that he is a widower, and that during any year of assessment he has a female relative living with him to take charge of any children, or to act as housekeeper, he shall receive an allowance. If he has no female relative who can live with him to act as housekeeper, he can employ a female person to act as housekeeper.
For many years there was doubt as to whether someone employed as housekeeper had to live with him if he was to receive the allowance. That doubt was cleared up in 1964, when the Court of Appeal held that any person employed

in the capacity of housekeeper had also to be resident with the taxpayer if he was to claim the allowance.
The allowance was created many years ago. The first relief was given in respect of relatives resident with the taxpayer to look after children. The housekeeper's allowance to look after the children was first given as long ago as 1920. For acting purely as a housekeeper to the widower or widow, the allowance was first given in 1924. These allowances are long-standing. Since those early days conditions under which people live have changed greatly. In those days it was common to have people living in one's home, looking after children or acting as housekeeper. Now it is not. Not only is it not customary to have people living in to assist with the housekeeping, but it is all the more difficult for anyone to obtain the services of such people if it is insisted that they live in.
Customs have changed. People more readily come to act as a housekeeper if they can go back to their own home at night. Many who are in need of this sort of help find it difficult enough to get any sort of help. The pattern of living for the taxpayer has changed in that the taxpayer may be living in a house in circumstances where it would not be convenient for him to have another person living under the same roof permanently.
The need for these allowances is as great as it has ever been, and because of the changed circumstances in which taxpayers live there is a great need to change the definition under which the allowance is granted. I am seeking to bring the definition of "housekeeper" up to date. The changing pattern of society fully justifies granting the allowance in accordance with today's conditions.

Mr. Richard Wainwright: I am happy to support this Amendment because the insistence on residence is no particular virtue. There is no entitlement to tax relief simply because a person has someone resident in his house. This must only have been inserted in the legislation out of an abundance of caution in earlier days aimed at assisting the Revenue in policing the administration of this Measure.
Insistence on residence has now become an intolerable burden for many


good reasons adduced by the hon. Member for Scarborough and Whitby (Mr. Michael Shaw), and for several others too. When the allowance was first introduced the use of a telephone by such people was relatively uncommon. Now it is a familiar arrangement, having regard to the difficulty of getting housekeepers to be wholly resident, for the employer to have a telephone. In this way the housekeeper can live out, returning at night to her home—which she wants to keep on, because otherwise her employer may die and leave her homeless—and keep in touch by telephone during the night for emergencies. This arrangement was not possible when the original legislation was drafted. Because these words are in the Statute only as a policing measure and not because of any inherent virtue in them, the time when they were valid is past and insistence on retaining them causes great unfairness and distress to particularly deserving people.

11.30 p.m.

Mr. Tom Boardman: I support the Amendment. The requirement about residence was not in the Statute. It sprang from a decision in 1937 which was reaffirmed in 1964.
One wonders whether it was ever the intention of the House that residence should be a requirement. In my constituency there are a large number of women who go out to work. The position is particularly hard for widows left with small children who wish to go out to work but find that the burdens of taxation make the decision a borderline one. They are often able to get neighbours to look after the children and to pay them. It is eminently reasonable that they should be allowed the relief of the housekeeper allowance for bringing in someone to look after the children while they go out to work. It is good for the widow, for the neighbours and for the economy.
This is an eminently sensible and reasonable Amendment which I hope will be accepted.

Mr. Donald Wiliams: I support the Amendment. The problem with the Revenue has been for many years that a person in this capacity would attract a dual allowance—that is, the

allowance as a wife and the allowance as a housekeeper. The Revenue has fought against this particular form of allowance.
The Minister has indicated that on the question of interest he over-rode his logic with common sense. Common sense would be brought into the law relating to the allowance for housekeepers if the Government accepted the Amendment. Two allowances are given when a married woman is working. Why cannot the Government give a special allowance for housekeepers?
A case in point was brought to my notice. A man's wife died and he was left with four children. He could get someone to look after them only during the day. He was not granted a housekeeper allowance. I hope that the Chief Secretary will accept the Amendment.

The Chief Secretary to the Treasury (Mr. John Diamond): I hope that I can meet the arguments and cases described, but I must make it clear that I cannot accept the Amendment.
Hon. Members have had in mind the case of the young child. When the housekeeper allowance was first devised—and the recent court case has merely removed doubt and reaffirmed the practice which has obtained throughout—what was envisaged was someone taking the place of a deceased wife in looking after young children. Therefore, after the children's mother died, the person who was helping would naturally live in to look after the children. Residence, therefore, was part of the conditions of the allowance.
We have moved on very considerably since then. That allowance remains at £75, but an additional personal allowance has largely taken its place, though not entirely. That further allowance, which meets the point made by every hon. Member so far in this debate, has been raised by my right hon. Friend in this very year to £100. It is available to a widow or widower with a young child, but it does not require that a housekeeper shall be employed, or that the housekeeper shall be resident, or even that there shall be a housekeeper. If a person has the use of some friend or relative to help, this allowance of £100 will be available.
The only purpose which the old housekeeper allowance still serves is a limited purpose, and one which has got some


distance from the original purpose. The purpose is not that of looking after children, not where a child is involved, but where there is a widow or widower. In this limited number of cases where there is a widow or a widower, and therefore nothing like the same need of help, an allowance of £75 is available only where the housekeeper employed is resident.
I hope that what I have said about the first allowance meets the real point that hon. Members had in mind. It is, in short, an allowance not of £75 but of £100 to a widow or widower and totally irrespective of whether the housekeeper is living in or is living in her own home and at the end of a telephone. That is the new situation as a result of the increase provided for in this year's Budget.
On the other allowance, I would not be able to recommend to the House that we should remove the restriction on living in, of residence there, because that would quite simply mean that in time we would inevitably be driven to give an allowance for everyone who employed outside domestic help. That is just what it would come to—to every widow or widower, and it would soon move even wider than that, who employed outside domestic help. It would be enormously expensive, and not based on need at all. It is for the individual to decide how to spend his money, and whether to spend it on outside help or not is an individual decision. I hope I have explained that the case that has been put is met not only as to £75 but as to £100, but I cannot recommend acceptance of the Amendment to the House.

Mr. Eldon Griffiths: The Chief Secretary's reply is disappointing, and I want to put two very narrow points to him.
If the concession is confined to housekeepers who remain overnight, the right hon. Gentleman is saying, in effect, that it is available only to those who have a room available where the housekeeper can live. I understand that the policy of both major parties towards the elderly is to encourage them to live in smaller homes; that is to say, to move out of what are in many cases council houses with two or three bedrooms into, in some areas, small specialised old people's homes. In almost every case there is no spare bedroom there, and cannot be. It would be wrong for the nation to

provide a spare bedroom. It is then not possible for a housekeeper to be resident. She cannot stay overnight, because there is no room for her, and in the circumstances described by my hon. Friend the person concerned is automatically excluded from benefiting from the concession. That cannot be just.
The other point is equally narrow but equally important. The concession will be available only to those who employ housekeepers to be resident overnight. Many women are glad to work as housekeepers and are badly needed by the elderly, who will not be able to meet the terms described by the Chief Secretary. Those housekeepers cannot be away at night because their husbands and children need them at home. Automatically that group of people, who are perfectly willing to be housekeepers, cannot do this work because of the terms of the legislation.
In the whole of our social policy with more and more elderly people living alone, it must be desirable to encourage people to work for them, at their own expense and encouraged by tax allowances rather than elderly people having to lean on the home help service or other services provided by the taxpayer. We should encourage people to rely more on their own hiring of help.

Mr. Michael Shaw: I echo the view of my hon. Friend the Member for Bury St. Edmunds (Mr. Eldon Griffiths) that the reply by the Chief Secretary was disappointing. I am grateful to my hon. Friends for their support for the Amendment.
With his usual skill, the Chief Secretary divided the case and sought to demolish it on the weaker grounds put forward. I accept that as far as concerns children that was the weaker ground, but acting as a housekeeper is the stronger case which I emphasised. The Chief Secretary said that if he were to grant the concession or extend the allowance by removing the need for residence that would open the whole case for an allowance for domestic help of all kinds. That danger has existed not only recently but since 1924 when the housekeeper allowance was introduced. Even in those days it was asked in what capacity was the domestic help used in the home. One had to satisfy the Inland Revenue that it was in the capacity of a housekeeper. That


test would still have to be applied whether the housekeeper were resident or not.
Changes which have come over the social scene in these many years since the original legislation was passed mean that it is natural in normal circumstances for the housekeeper to live outside rather than in the taxpayer's home. That is the whole criterion for this Amendment.

Amendment negatived.

Dame Irene Ward: On a point of order. Mr. Deputy Speaker. When you put the Question a second time hon. Members on this side of the House said "Aye". Did you not hear them?

Mr. Deputy Speaker: I put the Question and collected the voices and determined that the Noes had it, so the Noes have it.

Dame Irene Ward: Further to that point of order. Hon. Members on this side said "Aye", so you could not have collected the voices.

Mr. Deputy Speaker: It is for the Chair to decide when the voices have been collected. I have collected the voices on this issue and decided that the Noes have it.

Clause 16

REDUCTION IN AGE OF MAJORITY FOR TAX PURPOSES

Amendment No. 154 made: In page 18, line 33, leave out '12' and insert '13'.—[Mr. Diamond.]

Clause 18

DISALLOWANCE OF INTEREST AS A DEDUCTION

Amendments made: No. 212, in page 20, line 38, leave out from 'or' to 'if' in line 39 and insert:
'section ("loans made on or before 15th April 1969") of this Act'.

No. 213, in page 21, leave out lines 13 to 15 and insert:
(a) to interest on any debt incurred after 15th April 1969, and
(b) to interest paid after 5th April 1975 on a debt incurred on or before 15th April 1969.

No. 214, in line 17, after 'sections', insert:
'and the sections of this Act giving relief in respect of interest.'

No. 215, in line 24, leave out from first '1970' to end of line 26.—[Mr. Diamond.]

Clause 19

LOANS FOR PURCHASE OR IMPROVEMENT OF LAND

11.45 p.m.

Mr. Graham Page: I beg to move Amendment No. 266, in page 21, line 37, after 'interest' insert:
'(including in addition to the purchase money any premium under a mortgage guarantee policy or under a policy of indemnity against defects in the title to the property or against past breaches of obligations to which the property is subject or against unapportioned ground rents, rentcharges of chief rents to which the property is subject; and including also survey fees, woodwork or drainage specialists' fees for reports and guarantees, charges by associations of builders for certificates and guarantees, architects' fees, legal costs and disbursements and stamp duties.)'
The House will be pleased to observe that we have skipped rapidly from Clause 10 to Clause 19, subsection (2) of which provides that
interest is eligible for relief under this section if it is paid by a person for the time being owning an estate or interest in land in the United Kingdom on a loan to defray money applied—
(a) in purchasing the estate or interest, or one absorbed into, or given up to obtain, the estate or interest".
The Amendment is concerned with the interpretation of the words
money applied in purchasing the estate or interest".
This could mean the purchase money of the property solely and simply, and nothing more. Or it could mean that money expended in connection with, or in any way part of, the transaction of purchasing the property. If it means only the purchase money and nothing more, it will give rise to many niggling problems about apportionment of interest as between that which is given relief and that which is refused relief.
I understand the purpose of paragraph (a) to be that the Government do not want to deter purchasers of property by refusing them relief on the interest on a loan which they take to purchase that property. I believe, in particular, that the Government do not want to deter the owner occupier who buys his home with the assistance of a loan. After all, the


Government have done enough by allowing the increase in interest rates to deter the purchase of homes by owner-occupiers and it would be intolerable if the interest on loans used in the purchase of houses were denied relief under the Clause.
Subsection (2)(a) provides that the interest on money borrowed for the payment of purchase price is to be an allowable deduction against taxable income. The term "purchase price" is not used in the paragraph. The words are—
money applied in purchasing the estate or interest".
As I have said, this phrase might mean merely the purchase price, or it might mean any money expended in the course of the transaction. I hope that it means the latter, but the Amendment seeks to make that certain.
I remind the House of the sorts of payments which a purchaser is obliged to make when he is buying his home with the assistance, say, of a building society mortgage. The building society may be prepared to advance 75 per cent. The borrower wants 90 per cent. So the building society will arrange with an insurance company a mortgage guarantee policy to guarantee the payment of the margin of 15 per cent. Normally, it will add the once-for-all premium on that policy to the loan. It is not clear whether that item is money disbursed in the purchase of the property. It is certainly money disbursed in order to obtain the loan.
Investigation of title may reveal that there is a flaw in the title, for instance, a restrictive covenant providing that the property shall be used only as a single dwelling house, though in the course of years it has been turned into flats. The building society says that it cannot run the risk of someone trying to enforce the restrictive covenant and it wants an indemnity policy of insurance. Again, the once-for-all premium paid for that policy may be added to the loan.
When he applies to the building society for his advance, the borrower will pay a survey fee. Perhaps the report of the surveyor is that there is dry rot in the house and the drains seems to be defective. The building society requires expert reports on those matters, and they must be paid for. We try to encourage people

to buy the older houses, and the building societies make advances on them, but there are frequently expenses outside the purchase price in order to put the transaction through.
Many building societies refuse to advance money on new property unless it has been built by a builder who is a member of the National House-Builders Registration Council and there is a certificate guaranteeing the property for ten years. That certificate has to be paid for.
Finally, without necessarily declaring an interest, I mention the legal costs and disbursements and stamp duty.

Mr. Arthur Lewis: Largest of all.

Mr. Page: No, not largest of all. The estate agent's commission is the largest of all. The legal costs are a small proportion of what the purchaser has to pay out.

Mr. Lewis: The vendor, not the purchaser, pays the estate agent's fees.

Mr. Page: The vendor takes that into account in the price which he charges for the property. But that is a diversion, and I return to the fact that the purchaser finds that his bill for buying the property is much more than the purchase price. He has paid the money out. He has borrowed to pay not only the purchase price but also some of these other expenses, and the building society has added on to his total loan the premiums paid on the insurance policies. If he is not to have relief in respect of £30, £60 or £100 of the loan, though he has relief in respect of the rest, it will be a most complicated business.
I hope that the Chief Secretary will tell me, as he has on other occasions, that my Amendment is unnecessary and it is all in the Bill. But the wording is not clear. If the right hon. Gentleman gives some assurance, one hopes that the Revenue will follow up what he says. The courts are under no obligation to do so, but at least the Revenue has some obligation to obey Treasury Ministers. I hope that there will not be a niggling apportionment of the interest, some subject to relief and some not.

Mr. John Smith: The general effect of this part of the Bill is to introduce differential rates of interest. There are


to be certain purposes for which individuals may borrow money at one rate and certain purposes for which they may borrow at another rate. The provisions to which the Amendment relates will enable individuals to borrow money to buy land and property more cheaply than they can borrow it to buy other things. Therefore, it will put up the price of land and property because that will be almost the only asset that an individual can buy on borrowed money and get the interest allowed. When considering the Amendment, that is an important point.
Indeed one could, if one felt hostile and hypercritical, say that the Government are putting money into the pockets of property speculators. Furthermore, this shift in the nature of things which the individual will hold against borrowed money, from liquid assets to non-liquid assets such as land and property, will make it harder in future to make credit squeezes work. That is another point to consider.
But if we are to have this irrational distinction between different types of borrowing, clearly we must have the Amendment with it. I support the Amendment in general, but I am sorry to see that after mentioning wood work, drainage and legal costs it includes stamp duty as one of the things which one can borrow money to pay and get the interest allowed for tax purposes. I am sorry to see my hon. Friend the Member for Crosby (Mr. Graham Page) aiding and abetting the Chancellor in preserving this wasteful tax, which is particularly tiresome when it comes to house purchase, because most people who borrow money to buy a house pay four sets of stamp duty—on the house purchase, on the mortgage, on the insurance policy which they probably take out to secure the mortgage, and on the mortgage guarantee policy. Thus, there are four fiddling kinds of duty which should, as I said earlier, have been long since abolished. Although I support the Amendment, I am sorry to see the words "stamp duty" in it.

Mr. Diamond: Both the hon. Member for Crosby (Mr. Graham Page) and the hon. Member for the Cities of London and Westminster (Mr. John Smith) have contemplated in their speeches borrow-

ing on a mortgage to acquire property, and in these circumstances, of course, it would be not only rare but would not be the case that the amount of the loan would be greater than the total purchase price, because normally there is either a 10 per cent. or an even greater percentage difference. So, in spite of all these cases, the hon. Member for Crosby need not ask me for any help at all, because the whole of the loan could be said to be devoted to the purchase of the property.
But let us pursue the matter further, because I want to deal helpfully with the hon. Gentleman, and assume the unheard of case of the loan being fully equal to the whole of the purchase price and in addition covering the variety of incidental expenses to which he referred. I can say with the authority of a Treasury Minister within the Revenue—though, of course, I have none over the courts—that if ever such a ease came along the incidental expenses would be interpreted by the Revenue as being part of the cost of the property. Although I hate using words which he invited me to use, it is correct to say that this Amendment would be an unnecessary refinement.

12 m.

Mr. Graham Page: I am very glad to hear those words. The Chief Secretary has cleared up the doubt, but he must admit that there is doubt in the wording. Perhaps a better choice of words could have been made. With that assurance, and with the assurance that the Treasury will construe the Clause in that way, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. J. B. Godber: I beg to move Amendment No. 153, in page 21, line 39, at end insert:
(c) in the day-to-day management of an estate in respect of which rents are received quarterly or half-yearly in arrear, but not on any part of such loan which exceeds the amount of such quarterly or half-yearly rents receivable (provided that where any part of such rent is waived, relief under this section may continue to the extent reasonable in the circumstances) or.

Mr. Deputy Speaker: With this Amendment we will take Amendment No. 155, in page 21, line 39, at end insert:
(c) in the case of property let, to the fulfilment of statutory obligations in the matter of estate management, or.

Mr. Godber: As my hon. Friend reminded the House on the last Amendment, Clause 19 deals specifically with loans for the purchase or improvement of land. Subsection (2), with which these two Amendments are concerned, deals specifically with land ownership. Paragraph (a) gives relief to the purchase of an estate, and paragraph (b) gives relief to the improving or developing of such an estate. In Committee we sought to add maintenance, and this is the point at issue.
I want to address myself largely to rural estates and the problems that will arise for the estate owner if a change is not made here. I have carefully studied the arguments on this subject in Committee, in particular the comments of the Chief Secretary. I recognise that he was trying to draw a distinction, and at one stage I even thought that he was indicating that if a distinction could be drawn he would be able to look more favourably at the Amendments proposed by my hon. Friends in Committee which he could not at that time accept. The Chief Secretary said this:
I cannot, for the masons I have mentioned earlier, possibly contemplate giving this treatment to urban property.
I gather that this was because of the size of the problem. He went on to say:
I cannot see the distinction between urban property and agricultural property, and I conclude, therefore, that I cannot, with regret, recommend to the Committee that the Amendment should be accepted."—[OFFICIAL REPORT, Standing Committee F, 18th June, 1969; c. 474.]
That appeared to be his argument in rejecting Amendments which sought to add maintenance to purchase and development.
The Amendments are specifically designed to meet the Chief Secretary's anxiety. Amendment No. 153 is drawn in such a way as to try to differentiate between two different types of maintenance. The Amendment does not relate specifically to agriculture, but refers to the practice, which is almost universal in agriculture but which applies to few other cases, of rents being paid quarterly or half-yearly in arrears. This is where a distinction can be drawn, if the Chief Secretary is seeking to draw a distinction.
The fact that rents are being paid in arrears reinforces the need for a concession and means that in the majority

of cases landlords will wish to carry out the maintenance and to reimburse themselves from the rent properly applicable to the period concerned. There is absolute justice in saying that where the rent is paid in arrears any loan that is undertaken for maintenance at the appropriate time should qualify for relief. The wording of Amendment No. 153 in itself brings a clear justification.
In drawing attention to the fact that we have tried to meet the Chief Secretary, I make it abundantly clear that I disagree fundamentally with his claim that it is impossible to say that there is a distinction between agricultural estate ownership and urban estate ownership. If there were no special factors affecting agricultural estate ownership, why did a previous Labour Government refer specifically to the rights of capital invested in the agriculture industry as they did in Section 1 of the 1947 Agriculture Act? Why did they also pass the 1948 Agricultural Holdings Act which laid down specific responsibilities of land ownership?
The Chief Secretary argued in Committee that these responsibilities were no greater than those imposed on urban estate ownership. I would point out that those responsibilities go very much further. If he studies the 1948 Act in its entirety he will see that there is a large volume of responsibility. There is no doubt whatever that that Act shows clearly the wide statutory responsibilities placed on the agricultural landowner.
Agricultural estate ownership, although it now represents probably only just under a half of all agricultural holdings, continues to play an important part in providing capital for an industry which this Government are denuding of capital in many other ways. It is incumbent on the Government to encourage them in these provisions rather than to discourage them. It is wholly wrong that it should be singled out in this unfair way simply because it does not appear to fit into the tidy definitions of "business" or "private" which the Chief Secretary sought to lay down in Committee.
Having listened to him yesterday, I feel that his tidy definition got very blurred by some of the concessions he then made. This encourages me to think that be will allow it to be blurred even further in regard to this Amendment.
It seemed to me that yesterday he widened his attitude very considerably in one or two of the new Clauses.
On this particular issue one has to look a little further to understand what the Government are getting at. The Chief Secretary made one statement that irritated me very much when I read it. Admittedly he made it at 3 o'clock in the morning and he may not have been feeling at his best, but in answering a debate about the needs of agriculture he said:
The argument is that agriculture is helped in many ways, by the State, by the Treasury, as I know well, and that therefore it should continue to be helped in other ways, too."—[OFFICIAL REPORT, Standing Committee F, 18th June 1969; c. 472.]
That comment is pure prejudice and nothing else. In my view, the Chief Secretary was seeking to distort the whole argument put forward by my hon. Friends. There was no justification for that comment in their speeches.
These Amendments have been concerned with people who own agricultural property and who let it instead of farming it themselves. There is nothing wicked about anybody letting out land to farmers. In many cases it represents a real sacrifice because a much better income could be obtained by selling and investing elsewhere. Traditionally the return on estate ownership is one of the lowest in the land. But the help which the Chief Secretary talks of as coming from the Treasury to agriculture is not in the main directed to estate ownership at all but to the farmer, the man who actually farms the land, the tenant farmer in the case of an estate, or the owner occupier. Those are the people who receive the benefits about which the Chief Secretary was talking, although those benefits are steadily being reduced by the present Government. But that is outside the terms of the Amendment, and I say it in passing.
If agriculture is being helped at all, it is the farmer who is being helped. But it is the farmer, whether a tenant or an owner-occupier, who is safeguarded, because he comes within the Chief Secretary's definition of "business" and has no need to worry about offsetting interest on loans.
It is the estate owner alone who is involved here. If an estate owner sold

off his estate to his tenants, each of them would qualify immediately for the interest on his loans for maintenance to be set off, because each of them would be a business. Therefore, it is manifestly unjust to deny the same relief to an estate owner.
If, by the intervention to which I have referred, the Chief Secretary indicated that he wanted a chance to hit back at farmers, which seemed to be his intention, his refusal to accept the Amendment moved in Committee was a singularly inappropriate way of doing it. Every farmer in the country already comes within his definition of "business". We think that that is right, but we also think that the estate owner is equally entitled to expect his interest on loans for maintenance to qualify.
We put forward a straightforward Amendment in Committee, but it was rejected. Now we suggest an alternative method which would embrace agricultural estate ownership in virtually every case and might also include some other peripheral categories, but which is distinct from the generality of urban property ownership. We have therefore met the Chief Secretary's requirement for a distinction, and I hope that I have demonstrated the justice of the case.
I come now to two specific points on Amendment 153. First, although it has not been restricted to agricultural property but has been drawn quite generally, it is worth pointing out that, in relation to urban property, there are two large sectors to which it will have no relevance. They are property owned by companies, in respect of which interest is allowable, and owner-occupied property, to which the Amendment is irrelevant. In other words, the effect of the Amendment is preponderantly agricultural and can be distinguished in that way.
Secondly, although farm rents are by universal practice payable six months in arrear, many farm tenancy agreements contain the provision, which is deliberately not put into practice, that the rent is payable half-yearly in advance. It has been customary for land owners to borrow for day to day management sufficient to bridge the six-month lag in the receipt of rents. If owners are to be denied tax relief on the interest on such borrowings, it is logical to consider in contrast the position of a farm tenant. If he


borrowed to pay his rent, he would be allowed tax relief on the interest. But this is where the bite comes, because in general he does not possess the additional borrowing ability, and the Government's attitude to credit is such that it would be impossible for him to get them.
Following the passing of the Government's proposals, if an owner implemented the strict terms of such a tenancy agreement in requiring his rent to be paid half-yearly in advance, his farm tenants would have to find a full year's rent in one day. There would be the half-yearly rent traditionally payable in arrear, and the half-yearly rent for the ensuing half-year payable for the first time in advance. There will be no difficulty in imagining the chaos, ill feeling and perhaps worse that would be caused by such a course of action. It would be well nigh impossible for tenants to respond to such requests at the present time, in view of the Government's policy on agricultural credit. However, I do not seek to widen the debate into that subject, although there is strong feeling on this side of the House about it.
12.15 a.m.
I instance this as showing the absurdity, as well as the injustice, of the proposals as they now are. The Chief Secretary must surely concede that something must be done to assist here. In regard to agricultural estates, it is nonsense to safeguard the position of those who wish to purchase and of those who wish to improve, yet to deny the opportunity to those who wish to maintain their estates. The maintenance of an agricultural estate is an important aspect of the efficiency of the farming that goes on on that estate. Therefore, I believe that it is essential that some Amendment of this nature should be accepted. If the Government do not like our wording, they can clearly provide their own. But in Amendment No. 155 we have provided an alternative wording which, if accepted, would go a long way to meet the needs.
I do not wish to go over the arguments again, but we have tried to meet the differences in the points raised by the Chief Secretary. In Amendment No. 155, we have the wording:
in the case of property let, to the fulfilment of statutory obligations in the matter of estate management, or".

I have already referred to the Agricultural Holdings Act, 1948. That has very sweeping impositions. It is directly in relation to that Act that I think it is possible to claim that there is a responsibility on landlords which the Government should recognise. Indeed, the whole essence of that Act is summed up in Section 1(2) where, in defining agricultural land, it states:
land used for agriculture which is so used for the purposes of a trade or business.
If all agricultural land let by estates is let for trade or business, and if the Government accept that wherever trade or business is concerned it is legitimate to allow interest, surely the man who provides the land for letting to the farmer should equally qualify.
The Government must recognise the special circumstances of those who own and manage agricultural estates. They do not come within this narrow definition of "business". Yet they are directly related to the business of running farms, and they have specific responsibilities laid down in parliamentary enactments—particularly the 1948 Act.
If the Chief Secretary does not like Amendment No. 153, then I suggest that Amendment No. 155, with its reference to the statutory obligations, provides the necessary distinction that is required.
I remind the Government that the obligations of agricultural landlords are very far reaching. They extend far beyond the buildings. They extend to things like fences, gates, farm roads, drainage, farm water supply and many other things which are essential to the running of a farm business. This is a responsibility which the agricultural landlord willingly accepts. Therefore, it is entirely wrong to seek to divorce this from the whole sphere of "business" which the Chief Secretary seemed to think was one of the determining factors in the case.
I think that this is a very strong case indeed. I hope that the Chief Secretary will see the force of the argument and will concede the point.

Mr. Michael Jopling: I support what has been said by my right hon. Friend the Member for Grantham (Mr. Godber).
I cannot understand why the Chief Secretary, in Committee, was not able to accept that ownership of agricultural


estates is a perfectly normal business activity and why he distinguished the ownership of agricultural estates from other business activities.
I can envisage many instances, in the ownership of agricultural estates, when it would be absolutely vital that money should urgently be spent on maintenance, particularly in emergencies, and where that money would have to be borrowed to do it. In recent years there have been many instances of storm damage, particularly in Scotland. Considerable damage has been done to agricultural estates, and the repair and maintenance work has had to be done very quickly, otherwise all the farming operations on the estates would come to a halt.
The Government must accept Amendment No. 153, which is modest in its requirements. It applies to rents paid quarterly or half-yearly in arrears. It does not apply to estates where the rent is paid in advance, but includes cases where the landlord voluntarily forgoes the payment of rent in advance.
I have referred only to storm damage. Fire is another natural disaster which sometimes damages buildings which have to be dealt with speedily. Most landlords readily accept this responsibility, and immediately restore the damage that has been done. This is normal maintenance, which is covered in the Amendment, but would not be covered unless the right hon. Gentleman was prepared to meet this case. This is a real problem, and I hope that it will be met by the Government.

Mr. R. H. Turton: I want to try to clear up what I think is a little puzzling, especially to those who were not on the Committee, since when Clauses 18 and 19 have been changed. My right hon. Friend the Member for Grantham (Mr. Godber) and my hon. Friend the Member for Westmorland (Mr. Jopling) talked about rents being paid in arrear. In some parts of the country the custom is that the rent is not only paid in arrear but there is a lapse of three months between the date the rent is due and when it is collected. This means that when the estate owner is doing repairs he has to wait for the rent which will cover his expenditure on those repairs. Therefore, in the estate's account there is a period of the year when the money is at

the bank earning interest, and a period of the year when the account carries an overdraft.
Under this legislation, for the period of the year when the estate owner is earning interest, he pays tax on his interest, and for the period of the year when he is running his overdraft he gets no relief. He therefore loses on both the swings and the roundabouts because of this custom of rent being paid in arrear and the three months' delay. I ask the Chief Secretary to clear this up, because in some parts of the country this is very important.
Having listened to this debate, and having studied the Committee proceedings, my sympathies lie not only with estate owners but with the inspectors of taxes. It will be extremely difficult to disentangle the problem of what the loan is for, whether it comes within or without the scheme of relief.
My hon. Friend the Member for Westmorland talked about drainage. If an estate owner renews the drains in a field which was drained, 100 years ago, that is maintenance and repair and not improvement. If, however, he drains a similar field which has never been drained before that is improvement. In the one case the interest on the money that he borrows is allowed for tax relief, in the other it is not.
I ask the right hon. Gentleman to examine this Amendment with great sympathy, because what applies to drains could apply to buildings. In this modern age in estate management, one is in some cases scrapping old buildings and building new ones where one will be entitled to get relief because this is an improvement. In other cases, one is remodelling old buildings and getting no relief because this is repair and maintenance. I ask the Government to reconsider their attitude on the Committee stage.
In modern days—it was different in old times—the business of estate management is indistinguishable from any other business under Schedule D, and it is wrong to have one law for one type of person in the countryside and another for the remainder.
It is easy if an estate owner sells out to another person from the town. The latter can get the interest on the borrowed money free of tax and also relief in respect of interest on the money needed


for improvements made when the property is purchased, whereas the estate owner who is carrying out his obligations under the Agricultural Holdings Act gets no relief at all.

Mr. Edward du Cann: I rise to support warmly the case which has been argued by my right hon. and hon. Friends, and in particular the comprehensive review given by my right hon. Friend the Member for Grantham (Mr. Godber) so clearly and well in moving this Amendment.
Out of respect to the obvious wishes of the House, I shall be brief. It is this wish of the House which precisely illustrates our difficulty at present. The Committee stage of the Bill took place before a small number of hon. Members and here we are, late in the day—and it is day rather than evening—discussing this important Clause which the Government are proposing amending a Bill which substantially alters the business habits and practice of many important sectors of the community. This is outrageous.
My hon. Friend the Member for Crosby (Mr. Graham Page) made the point that we went in one remove from Clause 10 to Clause 19. It is a tragedy that we should be passing quickly ill-digested and badly written legislation. The Chief Secretary could curtail the debate in a moment by saying that he will graciously accept the obvious logic of the Amendment, but if he does not do that at least he owes the House an answer to two simple questions.
The first is: when is a farm a business and when is it not a business? I read the Committee stage report and I have listened to such logic as the Chief Secretary with charm and confidence pretends lies behind Clauses 18 and 19, but I cannot understand how this applies in farming and estate management.
I repeat the question: When is a farm a business and when is it not? The Chief Secretary remarked in an earlier debate that he cannot influence the courts. We know that, alas, it is not the intention of Ministers which counts but what is eventually in the Act. He went on to say, however, that the Government can influence the Inland Revenue. If he will not accept these Amendments to a Clause which he argues is justified, he at least owes the duty of explaining it clearly and fully and to say what in

his judgment constitutes maintenance and what does not, so that we all know precisely where we stand. If he is unwilling to detain the House for long tonight, by doing that, though he owes that explanation to the House and the farming community, let him tell the House how he proposes to make this clear at a very early date, though we should have the explanation before passing this miserable Clause into law rather than subsequently.
I repeat my two simple questions to the Chief Secretary: when is farming a business, and when is it not; and what precisely constitutes maintenance? I hope that we shall have a clear explanation.

12.30 a.m.

Sir Charles Mott-Radclyffe: I support my right hon. Friend the Member for Grantham (Mr. Godber) and my hon. Friends who have spoken so forcefully and clearly to the Amendment.
I hope that the Chief Secretary will not run away with the idea that this is not a very big issue, because it is. What we are debating is how, in respect of tax relief, loan facilities will be treated for the maintenance of all the agricultural land that is let in England, Wales and Scotland. Since I believe that that is about 48 per cent. of the total agricultural land it is a very large slice of the land on which this country's food production depends. This is not a hole-in-the-corner argument.
For the first time, as far as I know, the Government have sought to draw a clear dividing line in the way that loans are to be treated in respect of land in hand, which is a business, and land let, which is not. They have also drawn a dividing line for the first time in respect of loan facilities and the tax relief on them for improvement on the one hand and maintenance on the other. I believe that in many respects it will be almost impossible for any inspector of taxes to draw this dividing line.
The agricultural land owner has obligations far more diverse, diffuse, and onerous than the urban landlord. I agree with every word that my right hon. Friend the Member for Grantham said on this issue. Unlike any other landlord, the agricultural land owner is a party to a bargain with the Government under the 1948 Act, in which the party opposite rightly take pride. A partnership was


entered into between the various sectors of agriculture and the Government. The Government undertook to provide guaranteed prices for what were then called scheduled commodities. In return the farmer undertook to abide by the rules of good husbandry, and the land owner undertook to abide by the rules of good estate management. In extremis, both undertakings were enforceable, and rightly so.
It is clear that no agricultural land owner can choose to carry out repairs on farms that are let on a priority of convenience; he must undertake to do the repairs in a priority of urgency. He cannot say to a tenant farmer the roof of whose Dutch barn has been blown off in a gale, or who has suffered substantial flood damage, or whose milking parlour is in a shambles through an act of God, "I am sorry. I shall not repair your buildings because the half year's rent has rot yet come in. I shall wait until it does. But I shall repair the damage to my own farm buildings in hand, though they were not anything like so badly damaged, because I can get a loan and obtain tax relief on those buildings as the Government say that that is a business. But I cannot get tax relief on a loan for the repair of the buildings which are let, because the Government say that that is not."
Rightly, no agricultural land owner could possibly say that to a tenant. He must undertake the repairs in order of urgency and damage—and he is under a statutory obligation to do so—because stock are involved. The issue is wider than maintaining the farmhouse. There are the other buildings, drainage, fences —a whole gamut of things which do not concern any urban land owner.
The right way to deal with these maintenance and repair problems is by a loan. But the cost of the repair can absorb the whole year's rents, and it often does. There is nothing peculiar about that. The right way to do this is to raise the money by a bridging loan until such time as the rents come in. For the right hon. Gentleman to say that this is a loan for private purposes is nonsense. Does he really equate repairs to the roof of a Dutch barn or a farm building accommodating pedigree cattle with the building of a garage or a swimming pool?
What sort of order of priorities has he got? Does he understand anything about food production or the increased food production programme which the Government are asking the farming community to carry out?
This is all double-faced talk unless he meets us in some way on the Amendment. The principle has for long been ceded, because the capital expenditure on fixed farm equipment, which is the landlord's responsibility and the excess maintenance, have always been accepted by every inspector of taxes under the old Sections 313 and 314. If an estate owner has to borrow to discharge his direct obligations under a farm tenancy agreement, whose rents are taxable when they come in, it seems only logical and fair that he should be allowed to charge interest against tax on the money he has borrowed.
If this is not conceded, I warn the right hon. Gentleman and his colleagues that they will create an incredible number of anomalies. There could be the ridiculous anomaly whereby a farmer-tenant can borrow money to pay the rent and deduct the interest against income from his farm, whereas the landowner, if he borrows money to maintain the tenant's farm, cannot deduct interest against tax. There is the even more ridiculous position where, if the landowner does not wish, or cannot afford to go on with the burden of maintaining let property and sells it, the new purchaser is allowed relief on the loan to buy the farm and on the loan to do the repairs under Clause 19(5). If this is not cloud-cuckoo-land tell me what is.
My right hon. Friend mentioned the problem of rent six months in arrear. This is by custom, not by Statute. It would be absurd to drive any agricultural land owner into a position whereby he has to ask his tenants to renegotiate all tenancy agreements and pay rent in advance. They would not do it. The right hon. Gentleman is driving the estate owner to cut back on maintenance of land that is let and to concentrate on the improvement of land that he has in hand. This is contrary to the best traditions of estate management, contrary to all custom, and it is thoroughly bad for agriculture as a whole.
I can only say that if the right hon. Gentleman is serious in his demand that


the farming community should increase production I do not understand how he can put forward a policy by which a person can get tax relief on a loan to buy a caravan and go off on a holiday but cannot get tax relief on a loan to maintain farm buildings containing pedigree stock. This is the agricultural policy of a Government who say that they are trying to get into the Common Market.

Mr. Speaker: Order. Perhaps I might remind the House that after this debate there are 29 debates ahead of us. Brief speeches will not hurt.

Mr. Peter Mills: There is no doubt that the Government's proposal will have a very real effect on agricultural landlords. It will create serious problems for them. What is at stake is nothing less than good estate management. It is not a question of the agricultural lobby pursuing a small or minor point. Unless the Minister meets us in the Amendment, the effect on agriculture will be very serious. When we consider the size of this problem—48 per cent. of all land—we see how important it is.
We have been told that it is normal practice for payments to be made in arrears. This can lead to a very serious situation, for land owners obviously would have to borrow to carry out maintenance and repairs. Things are difficult enough in agriculture at present without putting another burden on the industry. Agricultural landlords are in business. They supply capital and fixed equipment to agriculture. They may not be in business in the eyes of the law, but I believe that they are. They play a very important part in the agricultural community, and it is important that they should be helped and not discouraged.
Work must be done quickly. It is not a question of delaying it. One can put off painting, but one cannot put off emergency work. It is ridiculous to leave a Dutch barn which has collapsed or any other serious maintenance problem. The work must be done quickly, and it must be paid for. The money for it must be found. If the rent is not paid, the landlord must borrow the money. It is easy to see this point. I cannot understand why the Minister cannot see it.
The alternative is that tenant farmers will have to pay in advance. This is

stupid. They cannot possibly find a year's rent in advance, particularly in present conditions, with overdrafts hitting the ceiling. It is hard enough to keep things going now without having to find a year's rent in advance. There is a serious principle at stake. If something is not done, the industry will be left in a critical position. In view of the importance of agriculture and the support which landlords are giving it, careful attention must be given to these Amendments.
It is not a small sum of money which is involved. Agricultural rents have, rightly, gone up and up. But a lot more money must be borrowed from the banks to finance maintenance and repairs. When one thinks of some of the rents, running into thousands of pounds, one realises what a serious situation could arise if the Minister does not consider the Amendments favourably. I repeat that this is not a small point pushed by the agricultural lobby in the House. Good estate management is at stake. I hope that the Minister will seriously consider the points put to him.

Mr. Paul Hawkins: I am glad to have a few moments to speak on this subject because I manage several estates. For anybody to say that the management of a landed estate let to farming tenants is not business is absolute nonsense.
The job of trying to make ends meet throughout the year is very difficult on many estates. Farm rents are payable in arrears, and for quite a time, and particularly during the next year, we will have great difficulty in collecting rents in certain areas which were badly damaged last year by flooding. An enormous amount of drainage work will have to be done, and money will have to be advanced for it so that tenants may produce the crops and pay the rents in future.
Estate management is a real business. One must try to make ends meet, otherwise the estate cannot be carried on. I do not know whether the borrowing of money by a landlord to pay an agent for managing the estate would be tax allowable, but we cannot go into that now. But there are many sides to this question. In our last agricultural debate, almost every speaker said how necessary drainage work would be in the


autumn on the waterlogged land. A lot of money will need to be borrowed to enable that work to be done. If we cannot borrow the money and charge the interest against the running of the estate, it will make a big difference. I am glad that the Joint Parliamentary Secretary to the Ministry of Agriculture is present: I hope that he is giving his near neighbours some good advice. I just cannot believe that the Government will not accept the Amendment.

12.45 a.m.

Mr. J. E. B. Hill: Can the Chief Secretary tell us how much the Treasury hope to save by disallowing agricultural maintenance? I suspect that the sum is quite large. If it is, that merely emphasises the tremendous significance and importance of maintenance. Is the right hon. Gentleman aware that in any textbook of rural estate management there is a long chapter having as its theme the importance of keeping maintenance up to date?
Has he further considered the psychological effect on the owner of discriminating against maintenance in this way? It must follow that the tenant occupier of the land will feel that in a time of stringency he can neglect some of his own obligations in return. Nothing could have a worse psychological effect on the industry,
If the Chief Secretary does not much mind about that, I might tell him that it could have a worse psychological effect on the image of the Government in the eyes of the people, because this action in the Budget is wholly inconsistent with the Government's profession of their support for agriculture, their desire to see an expanding, modern industry. What other industry is having one section of its fixed equipment—the equivalent of the factory floor—and much of its raw materials—the land—discriminated against? How can he justify such discrimination against one sector of one large industry?

Mr. John Wells: Generally horticultural holdings are owner-occupied, but some of the larger and more complicated ones are inevitably let to tenants. On those maintenance is most costly. A horticultural holding is more labour-intensive and more capital-intensive than a mixed farm. Problem

which apply to agriculture generally are multiplied many times when applied to horticulture. There are massive cold stores, packing sheds and buildings of that sort. That maintenance of those buildings and the equipment when they are landlords' property will not be allowed is a great absurdity. When he reconsiders this situation, as I hope he will, I hope that the Chief Secretary will bear this in mind.

Mr. Tom Boardman: Arguments in favour of this Amendment have been marshalled largely to deal with the problem for agriculture, but my right hon. Friend the Member for Grantham (Mr. Godber) made clear that the evil applies also to urban estates. This is so especially on small estates where the owner is faced with the problem of repairing roofs to houses. He cannot get relief for that, but he can obtain it for constructing a swimming pool. The Chief Secretary must know how artificial is the line drawn in respect of maintenance. The Revenue has to decide how much maintenance arose before ownership started. It will be impossible to decide that when a new roof has to be put on a cottage and how much wear and tear developed over the previous 45 years. It is a nonsense.
Having listened to the powerful arguments on behalf of agriculture, I remind the Chief Secretary that the Amendment applies also to urban properties. It is far too modest to meet the requirement to do justice to owners of houses and other buildings apart from agriculture, but it is a step in the right direction and I hope that the right hon. Gentleman will accept it.

Mr. Temple: I would not rise at this late hour if I did not think there was a point which has not been raised already in this debate. The debate has centred mainly on large agricultural estates, but there is a development in farming which is entirely new and which should be considered. I refer to the practice of owner-occupiers selling on a system of leaseback.
There is tremendous shortage of capital. Any owner-occupier today is desirous of raising more capital to develop possibly an intensive farming interest. The Parliamentary Secretary to the Ministry of Agriculture will know of this


new development. An owner-occupier farming his land is in a privileged position under these Clauses, but if he sells out on the basis of lease-back, although the situation is exactly similar, in fact a different ownership has taken place. In those circumstances the maintenance situation in regard to capital requirement to finance maintenance will be different. Is it right to act against this progressive system of lease-back? This practice will increase in the immediate future. In Field and Country Life one often sees advertisements involving the lease-back system to put more money into owner-occupied farms. I believe that, unless the Chief Secretary accepts the Amendment, he will stultify the progress which the lease-back system is making.
I endorse what my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) said about land drainage. It is well known that land drainage is one of the most important aspects of maintenance. Much of our land drainage was done a century or a century and a half ago. Nevertheless, it is maintenance if that land drainage is being renewed. One of the biggest calls for capital in agriculture, and the most productive investment, is land drainage.
Of these two points I stress most particularly that about lease-back, because I do not believe that the Government would want to stultify the progress of this new scheme which is effective in bringing capital into argriculture.

Mr. John Smith: The Government are trying to make a distinction where none exists. With agricultural property there is no true distinction between maintenance and improvement. Some so-called maintenance is improvement. Some owners spend more on repairs and maintenance than the whole of the rent. They gradually work up a higher state of repair and maintenance. As a consequence, they run up an overdraft which they repay occasionally by a sale—for example, by the sale of agricultural cottages no longer required because of the progress of agriculture. Property is not like gilt-edged stock. It cannot be sold in penny numbers to repay an overdraft. It can be sold only in amounts of quite large value occasionally.
I referred to the difficulties of making this distinction. Owners do not make it

in their bank accounts. All these provisions which will make it necessary to distinguish between improvement and maintenance, because there are to be differential rates of interest on borrowing, and will mean innumerable separate bank accounts in innumerable different branches of banks. It is simply more sand in the national gearbox. The Chief Secretary recognised this in Committee by saying this:
It is impossible, or almost impossible, to segregate money and say. 'This particular pound was used for this particular purpose.' "—[OFFICIAL REPORT, Standing Committee F, 18th June, 1969; c. 446.]
The converse of what I have said about maintenance often being improvement is also true. Some improvement is maintenance. Many improvements are essential to maintain rental value, just as essential as repairs are. Consequently, all landowners are making improvements all the time. As a result, it will be perfectly simple for them, if they wish, gradually to shift their borrowing on their present amalgamated accounts on to an account which they say is specifically for improvements. Therefore, as in a short time it will be easy for landowners, if they are so inclined, to avoid the purpose of this legislation, I hope that the Chief Secretary will see fit to save them from these subterfuges and accept the Amendment.

Mr. Diamond: I invite the House to be good enough to consider the present situation with regard to the law affecting landowners and farmers. I answer immediately the question put to me by the right hon. Member for Taunton (Mr. du Cann) by saying that the answer is that farming is always a business. There is no problem about that.
There is a problem, however, in the existing law. I am not talking about interest or the disallowance of interest. I am inviting the House to consider what the present law is, a law which has been the case for a very considerable time, the time affecting all parties and all Governments. The law is that an agricultural landowner is not treated as carrying on a trade so long as he is an individual. That is the present situation, and it has been so for many years.
1.0 a.m.
Time and again, right hon. and hon. Gentlemen have referred to the business


of estate management. It is a phrase which I well understand. It describes the activities which go on, but those activities of an individual do not constitute a trade for income tax purposes. If, however, an agricultural land owner, be his estates large or small, turns himself into a limited company and by that process segregates these activities from the rest of his personal activities, the activities carried on by him as director of the company, albeit they are the identical activities which he previously carried on as an individual, are treated as a trade, by the sheer process of separating them from the other personal activities which he continues to carry on elsewhere.
That is the present situation under the law. It is right to describe the position as one of considerable difficulty and complexity, and it is not easy to see why in one case the treatment should be of one kind and in another case it should be different. But that is the present law. We are not proposing to alter that law. Accordingly, business expenses are business expenses, and private expenses are private expenses. Business expenses include a host of things, among them interest on borrowed money.
Expenses incurred by a company carrying on the trade of estate ownership and management are not trade or business expenses if those same activities are carried on by an individual personally. That is the present situation. I do not say that hon. Members opposite have been satisfied or have even been aware of it, but they have been acting under it for years and years.
It is not surprising, therefore, that when one puts the searchlight on a particular expense it becomes of importance whether it is treated as a business expense or not; but that depends not on any proposals in the Bill but on the law as it is at the moment. Every estate owner who runs his estate as an incorporated company receives and will continue to receive relief on interest on borrowed money, and every individual who carries on broadly the identical activities will not because he is not carrying on a trade under the Income Tax Acts. If that was to be criticised, the criticism could have come during past years. All I am doing is reminding the House that what we are now experiencing is the high-lighting of the

difficulty through the development which we are proposing in the Bill.

Mr. Michael Alison: Why has the Chief Secretary breached this clear principle in the matter of the acquisition and improvement of land?

Mr. Diamond: The Chief Secretary has not. I have never said that improvement of land is in all cases a business. I have said that we are making, as a deliberate decision of policy, as an exception, the acquisition and improvement of property. We are in a difficult situation, but obviously the situation is not difficult for those who run their estates as companies.
The right hon. Member for Grantham (Mr. Godber) moved the Amendment with his usual clarity and courtesy. I appreciate that he has gone to considerable lengths to try and separate the functions of an agricultural estate owner from the functions of an urban estate owner. But he recognised that one cannot do this completely, and the hon. Member for Leicester, South-West (Mr. Tom Boardman) has helped the argument considerably by making it clear that one cannot do it at all and that one should not attempt to do it at all. The hon. Gentleman logically went on to say that he did not see why this relief should apply not merely to the urban estate owner but to a man owning a couple of houses, for example.
The hon. Gentleman is, of course, right. One cannot distinguish in drafting or in common sense or in the pressures of the case. I recognise that there is a considerable case here, and I have gone carefully into all the distinctions which have been drawn, receiving a most valuable deputation and obtaining a lot of useful information. But the fact remains that one cannot distinguish, even in difficulty or in hardship, between an agricultural estate and an urban estate by the compulsions which are put upon the owner.
Therefore, I cannot accept the Amendment because the difficulty, such as it is, stems from the existing law, which we are not altering, and because the area proposed by the Amendment to be segregated cannot be distinguished in any tenable way from urban property which, in turn, cannot be distinguished from the owner-occupier.
If one pursues the argument of allowing interest first to the landed estate owner, then to the urban estate owner, and then to the owner-occupier, one has torpedoed the provision completely. One might say that that is a good thing, But I want to make it clear that we could not sensibly bring in this proposal at all if we had in mind allowing maintenance of owner-occupied property. Every owner-occupier incurs maintenance and repairs practically every year—certainly very frequently, and it would be impossible to deny this concession to the owner-occupier with a loan which he had incurred and which was associated with maintenance and repairs. The cost would be such that there would be nothing left of the provision at all. I hope I have made clear the logical steps from the Amendment and why it is utterly impossible to accept it.

Mr. John Smith: The right hon. Gentleman must not say that it is impossible to distinguish between agricultural and urban property when that distinction is made every day by the Inland Revenue in the matter of estate duty. Indeed, it is easier to distinguish between the two than between maintenance and improvement.

Mr. Diamond: Of course, I recognise that there is estate duty relief given for agricultural property which is not given for urban property. I am saying that for the purposes of interest one cannot distinguish between one and the other. If the hon. Member for the Cities of London and Westminster (Mr. John Smith) is asking me whether I can distinguish between Smith Street and 10 acres in the middle of Huntingdonshire,

Division No. 334.]
AYES
[1.13 a.m.


Alison, Michael (Barkston Ash)
Chataway, Christopher
Gibson-Watt, David


Allason, James (Hemel Hempstead)
Chichester-Clark, R.
Gilmour, Sir John (Fife, E.)


Astor, John
Clark, Henry
Glover, Sir Douglas


Awdry, Daniel
Clegg, Walter
Glyn, Sir Richard


Baker, Kenneth (Acton)
Cooke, Robert
Godber, Rt. Hn. J. B.


Baker, W. H. K. (Banff)
Crowder, F. P.
Goodbart, Philip


Bennett, Sir Frederic (Torquay)
Cunningham, Sir Knox
Goodhew, Victor


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Dalkeith, Earl of
Gower, Raymond


Biffon, John
d'Avigdor-Goldsmid, Sir Henry
Grant, Anthony


Black, Sir Cyril
Dean, Paul
Grieve, Percy


Blaker, Peter
Deedes, Rt. Hn. W. F. (Ashford)
Griffiths, Eldon (Bury St. Edmunds)


Boardman, Tom (Leicester, S. W.)
Drayson, G. B.
Gurden, Harold


Boyle, Rt. Hn. Sir Edward
du Cann, Rt. Hn. Edward
Hall, John (Wyoombe)


Braine, Bernard
Elliott, R. W. (N'c'tle-upon-Tyne, N.)
Hall-Davis, A. G. F.


Brown, Sir Edward (Bath)
Eyre, Reginald
Hamilton, Lord (Fermanagh)


Bruce-Gardyne, J.
Farr, John
Harvey, Sir Arthur Vere


Buchanan-Smith, Alick (Angus, N&amp;M)
Fisher, Nigel
Hastings, Stephen


Burden, F. A.
Fletcher-Cooke, Charles
Hawkins, Paul


Campbell, B. (Oldham, W.
Fortescue, Tim
Heseltine, Michael


Carlisle, Mark
Foster, Sir John
Higgins, Terence L.

yes, I am capable of doing that. I am trying to make clear that in the context of what we are considering neither I nor the hon. Member for Leicester, South-West can distinguish between the two.

Mr. Godber: We on this side are shocked at the answer given by the Chief Secretary. It is completely inadequate and lacking in the logic which he normally employs. He has claimed that the difficulty stems from the existing law. The law has certainly continued for a long time the strange dichotomy of the position of the agricultural estate. We accept that, but it is he and his colleagues who are penalising landowners in relation to the law. The Government should accept that they are penalising them and find a way to help them.
The Chief Secretary gave no explanation that carried any weight with anybody on either side of the House in relation to his distinction between purchase and development and maintenance. He is really saying that he wants money out of urban property, he cannot distinguish between urban and agricultural property and what does it matter about farmers anyway? That is what his arguments came down to. It is a disgraceful reply. It does not meet the case; agriculture will be harmed; estate ownership will be 'harmed; agricultural development, of which we have heard so much from the Government, will be damaged; and I hope that my hon. and right hon. Friends will record their view in the Lobby.

Question put, That the Amendment be made:—

The House divided: Ayes 145, Noes 197.

Hiley, Joseph
Mills, Peter (Torrington)
Scott-Hopkins, James


Hill, J. E. B.
Mills, Stratton (Belfast, N.)
Sharples, Richard


Holland, Philip
Mitchell, David (Basingstoke)
Shaw, Michael (Sc'b'gh &amp; Whitby)


Hordern, Peter
Monro, Hector
Silvester, Frederick


Hornby, Richard
Montgomery, Fergus
Smith, Dudley (W'wick &amp; L'mington)


Howell, David (Guildford)
Morgan-Giles, Rear-Adm.
Smith, John (London &amp; W'minster)


Hunt, John
Morrison, Charles (Devizes)
Speed, Keith


Hutchison, Michael Clark
Mott-Radclyffe, Sir Charles
Stainton, Keith


Iremonger, T. L.
Munro-Lucas-Tooth, Sir Hugh
Stodart, Anthony


Jenkin, Patrick (Woodford)
Nott, John
Taylor,Edward M. (G'gow, Cathcart)


Jones, Arthur (Northants, S.)
Onslow, Cranley
Taylor, Frank (Moss Side)


Jopling, Michael
Orr-Ewing, Sir Ian
Temple, John M.


Joseph, Rt. Hn. Sir Keith
Osborn, John (Hallam)
Turton, Rt. Hn. R. H.


Kershaw, Anthony
Page, Graham (Crosby)
van Straubenzee, W. R.


Kimball, Marcus
Percival, Ian
Vaughan-Morgan, Rt. Hn. Sir John


King, Evelyn (Dorset, S.)
Pike, Miss Mervyn
Waddington, David


Kirk, Peter
Pink, R. Bonner
Weatherill, Bernard


Kitson, Timothy
Pounder, Rafton
Wells, John (Maidstone)


Knight, Mrs. Jill
Powell, Rt. Hn. J. Enoch
Whitelaw, Rt. Hn. William


Lane, David
Price, David (Eastleigh)
Wiggin, A. W.


Legge-Bourke, Sir Harry
Prior, J. M. L.
Wilson, Geoffrey (Truro)


MacArthur, Ian
Pym, Francis
Wolrige-Gordon, Patrick


Maclean, Sir Fitzroy
Ramsden, Rt. Hn. James
Woodnutt, Mark


Macleod, Rt. Hn. Iain
Renton, Rt. Hn. Sir David
Worsley, Marcus


McNair-Wilson, Michael
Ridley, Hn. Nicholas
Wright, Esmond


Maddan, Martin
Ridsdale, Julian



Maginnis, John E.
Rossi, Hugh (Hornsey)
TELLERS FOR THE AYES:


Marten, Neil
Royle, Anthony
Mr. Jasper More and


Maude, Angus
Russell, Sir Ronald
Mr. Humphrey Atkins.


Maxwell-Hyslop, R. J.
Scott, Nicholas



NOES


Allaun, Frank (Salford, E.)
Eadie, Alex
Lewis, Arthur (W. Ham, N.)


Anderson, Donald
Edwards, William (Merioneth)
Lewis, Ron (Carlisle)


Archer, Peter
Ellis, John
Lipton, Marcus


Ashley, Jack
English, Michael
Loughlin, Charles


Atkins, Ronald (Preston, N.)
Ennals, David
Lubbock, Eric


Atkinson, Norman (Tottenham)
Ensor, David
Lyon, Alexander W. (York)


Barnett, Joel
Evans, Fred (Caerphilly)
Mabon, Dr. J. Dickson


Baxter, William
Evans, Ioan L. (Birm'h'm, Yardley)
McCann, John


Bence, Cyril
Fitch, Alan (Wigan)
MacColl, James


Benn, Rt. Hn. Anthony Wedgwood
Fletcher, Raymond (Ilkeston)
Macdonald, A. H.


Bidwell, Sydney
Fletcher, Ted (Darlington)
McGuire, Michael


Binns, John
Foot, Michael (Ebbw Vale)
McKay, Mrs. Margaret


Bishop, E. S.
Ford, Ben
Mackenzie Gregor (Rutherglen)


Blackburn, F.
Forrester, John
Mackie, John


Blenkinsop, Arthur
Fowler, Gerry
Mackintosh, John P.


Booth, Albert
Freeson, Reginald
Maclennan, Robert


Boston, Terence
Gardner, Tony
McMillan, Tom (Glasgow, C.)


Boyden, James
Gray, Dr. Hugh (Yarmouth)
McNamara, J. Kevin


Bradley, Tom
Gregory, Arnold
Mahon, Peter (Preston, S.)


Bray, Dr. Jeremy
Grey, Charles (Durham)
Mahon, Simon (Bootle)


Brooks, Edwin
Griffiths, David (Rother Valley)
Mallalieu, E. L. (Brigg)


Brown, Hugh D. (G'gow, Provan)
Griffiths, Eddie (Brightside)
Mallalieu, J. P. W. (Huddersfield, E.)


Brown, Bob (N'c'tle-upon-Tyne, W.)
Hamilton, James (Bothwell)
Manuel, Archie


Brown, R. W. (Shoreditch &amp; F'bury)
Hannan, William
Mapp, Charles


Buchan, Norman
Harper, Joseph
Marks, Kenneth


Buchanan, Richard (G'gow, Sp'burn)
Harrison, Walter (Wakefield)
Marquand, David


Callaghan, Rt. Hn. James
Haseldine, Norman
Mellish, Rt. Hn. Robert


Carmichael, Neil
Hazell, Bert
Mendelson, John


Carter-Jones, Lewis
Henig, Stanley
Mikardo, Ian


Chapman, Donald
Hooley, Frank
Miller, Dr. M. S.


Concannon, J. D.
Houghton, Rt. Hn. Douglas
Milne, Edward (Blyth)


Crostand, Rt. Hn. Anthony
Howarth, Robert (Bolton, E.)
Mitchell, R. C. (S'th'pton, Test)


Dalyell, Tam
Howell, Denis (Small Heath)
Molloy, William


Davidson, Arthur (Accrington)
Hoy, Rt. Hn. James
Morgan, Elystan (Cardiganshire)


Davies, G. Elfed (Rhondda, E.)
Hughes, Rt. Hn. Cledwyn (Anglesey)
Morris, Alfred (Wythenshawe)


Davies, Dr. Ernest (Stretford)
Hughes, Roy (Newport)
Morris, Charles R. (Openshaw)


Davies, Rt. Hn. Harold (Leek)
Hunter, Adam
Morris, John (Aberavon)


Davies, Ifor (Gower)
Jackson, Colin (B'h'se &amp; Spenb'gh)
Moyle, Roland


de Freitas, Rt. Hn. Sir Geoffrey
Jay, Rt. Hn. Douglas
Murray, Albert


Dell, Edmund
Jeger, Mrs. Lena (H'b'n&amp;St.P'cras, S.)
Newens, Stan


Dempsey, James
Jenkins, Rt. Hn. Roy (Stechford)
Ogden, Eric


Dewar, Donald
Johnson, Carol (Lewisham, S.)
O'Malley, Brian


Diamond, Rt. Hn. John
Johnson, James (K'ston-on-Hull, W.)
Oram, Albert E.


Dickens, James
Jones, T. Alec (Rhondda, West)
Orbach, Maurice


Dobson, Ray
Judd, Frank
Orme, Stanley


Doig, Peter
Kerr, Mrs. Anne (R'ter &amp; Chatham)
Oswald, Thomas


Driberg, Tom
Kerr, Dr. David (W'worth, Central)
Owen, Dr. David (Plymouth, S'tn)


Dunnett, Jack
Kerr, Russell (Feltham)
Page, Derek (King's Lynn)


Dunwoody, Mrs. Gwyneth (Exeter)
Lawson, George
Palmer, Arthur


Dunwoody, Dr. John (F'th &amp; C'b'e)
Leadbitter, Ted
Parkyn, Brian (Bedford)



Lee, John (Reading)
Pavitt, Laurence







Peart, Rt. Hn. Fred
Short, Mrs. Renée (W'hampton, N. E.)
Whitaker, Ben


Pentland, Norman
Silkin, Rt. Hn. John (Deptford)
Whitlock, William


Perry, Ernest G. (Battersea, S.)
Silkin, Hn. S. C. (Dulwich)
Williams, Alan (Swansea, W.)


Perry, George H. (Nottingham, S.)
Silverman, Julius
Williams, Alan Lee (Hornchurch)


Price, Christopher (Perry Barr)
Skeffington, Arthur
Williams, Clifford (Abertillery)


Probert, Arthur
Small, William
Williams, Mrs. Shirley (Hitchin)


Rees, Merlyn
Spriggs, Leslie
Willis, Rt. Hn. George


Roberts, Rt. Hn. Goronwy
Summerskill, Hn. Dr. Shirley
Wilson, William (Coventry, S.)


Roberts, Gwilym (Bedfordshire, S.)
Taverne, Dick
Winnick, David


Rodgers, William (Stockton)
Thomson, Rt. Hn. George
Winstanley, Dr. M. P.


Roebuck, Roy
Tinn, James
Woof, Robert


Ross, Rt. Hn. William
Urwin, T. W.



Rowlands, E.
Varley, Eric G.
TELLERS FOR THE NOES:


Ryan, John
Wallace, George
Mr. Ernest Armstrong and


Shaw, Arnold (Ilford, S.)
Watkins, David (Consett)
Mr. Neil McBride.


Sheldon, Robert
Watkins, Tudor (Brecon &amp; Radnor)



Shore, Rt. Hn. Peter (Stepney)
Wellbeloved, James

Sir C. Mott-Radclyffe: I beg to move Amendment No. 238, in page 21, line 43, at end insert 'or
(d) in carrying out any works for which a grant has been, or will be, given on the advice of the appropriate Historic Buildings Council'.

Mr. Speaker: With this Amendment we are discussing the sub-Amendment, in line 2, at end add 'or under any Act which may enable a local authority to recommend an historic buildings grant'.
Perhaps I might again remind the House that after this debate there are 28 more debates on Report. I am grateful to hon. Members who responded to my appeal for brief speeches in the last debate. Brief speeches will help.

Sir C. Mott-Radclyffe: Mr. Speaker, I shall respond to your request and be extremely brief.
At the outset, I should explain that the hon. Member for Barking (Mr. Driberg) and I are the two Parliamentary representatives on the Historic Buildings Council for England. The Amendment is drafted with the words
the appropriate Historic Buildings Council
because there are separate councils for Scotland and Wales and we were not trying to obtain a concession in respect of England at the expense of Wales and Scotland, for obvious reasons.
The Historic Buildings Council is responsible for advising the Government on grants for the upkeep and restoration of buildings of historic and architectural importance as regards both exteriors and interiors. In the case of private houses, we apply a means test to make sure that an owner who has applied for a grant cannot afford the sum required to restore his house, and the conditions imposed are that the house must be open to the public. Of course, the Historic Buildings Coun-

cil's reports are published annually and can, in effect, be debated by this House.
We rarely give a grant of more than 50 per cent. of the cost, and that 50 per cent. is seldom given until the work is completed. Thus, an applicant has to borrow the money for the whole cost of the operation knowing that when the work is completed he will get back 50 per cent. or some smaller proportion of the total sum by reason of the grant recommended by the Council. Until now, the owner has been able to set off bank interest against other income for tax purposes; in other words, he has been able to service the loan net instead of gross.
A completely different situation has now arisen. Under the Government's new Clause 28, anybody who is in receipt of a grant previous to 15th April—Budget day—is all right in relation to tax relief on the loan up to 1975; anybody who is in receipt of a grant after that date will not be able to service that loan net but will have to service it gross.
Therefore, this curious anomaly will arise. Let us suppose that owner A is in receipt of a grant, upon the recommendation of the Council, early in April this year and owner B is in receipt of a grant upon the recommendation of the Council early in May this year. Owner A will be able to deduct the bank interest against other sources of income, but owner B will not. This creates a ridiculous position.
It is important that houses of historic interest, together with their contents, should be maintained in a fit state to be open to the public. There is no doubt that the public enjoy seeing them, because the figures of visitors to these houses increase annually. Indeed, there is almost a race between the owners of historic houses to see who can attract the most visitors.
But there is a great difference between borrowing net and borrowing gross. If we put an unfair or impossible financial burden on an owner, he will not be able to defray 50 per cent. of the cost of maintaining his house or of preserving it into good repair.
I want to put before the Chief Secretary two simple examples which I have worked out. If my arithmetic is wrong, I am prepared to be told that it is. I want to take two hypothetical owners of historic houses—Mr. A. and Mr. B. I presuppose that the cost of renovating and repairing each of their houses is £40,000. That is for eradicating dry rot, repairing the roof, the stonework, and so forth. Mr. A gets a 50 per cent. grant before 15th April and Mr. B gets a 50 per cent. grant after 15th April; that is, each gets £20,000. Each owner has to borrow the whole £40,000, knowing that he will be getting £20,000 back when the work is completed. Owner A, who was in receipt of the grant early in April, will be able to deduct the interest on the bank loan against his other sources of income. Owner B will not. Borrowing at 10 per cent. on £40,000 is £4,000. Assuming that both owners are surtax-payers at 14s. 9d. in the pound, it will cost owner A about £900 a year to service the loan until the grant is repaid, but it will cost owner B. servicing the loan gross, £12,000. If owner B could afford £12,000 a year. He would not have passed the Council's means test and would not have got the grant.
So, in two comparable cases involving the same amount of money, one is allowed to deduct the loan interest against tax and the other is not.

Mr. Arthur Lewis: May I ask whether the means test is based on the social security scale? How is the means test based?

Sir C. Mott-Radclyffe: The hon. Gentleman knows very well how the means test is conducted. The owner's resources are gone into with very great care. There has never been any dispute about that.
I am pointing out the ridiculous anomaly which will arise between a grant given before Budget day and a grant given after Budget day. This will raise serious complications. It will mean

that an owner who applies for a grant now will have to service the loan gross and that will put him in great difficulty. Many of those who would have accepted 50 per cent. and done the necessary renovations to the house will no longer be able to do so, and therefore houses of great historic importance, with valuable contents, will not be maintained to the benefit of the public, but will fall down.
I know that in theory local authorities have power to clap on a compulsory preservation order. I know that in extremis they have power to acquire compulsorily, but this is a bluff, because we know that the money is not available for them to do so. Therefore, if the Government wish to enable owners to maintain a fit state for the public to see houses of historic interest, it would not only be far easier, but cheaper and more sensible to allow houses in receipt of a grant from the Council to attract tax relief, which they used to get before the Budget was brought in.

1.30 a.m.

Mr. Tom Driberg: I shall speak briefly at this time of night. It is nobody's fault in particular that this Amendment happens to arise so inconveniently late, and I am sorry to detain the House for even a few minutes.
I support the Amendment, because if my right hon. Friend were to reject it he would be doing something which would tend to frustrate the intention of the Government themselves, who provide these grants through the Ministry of Housing and Local Government, on the advice of the Historic Buildings Council, on which both the hon. Member for Windsor (Sir C. Mott-Radclyffe) and I sit. Even in the conditions of economic stringency of the past year the Government saw fit to increase the relatively modest budget of the Council by £100,000. The total budget for each year is now £650,000, which is not an enormous sum, as hon. Members would realise if they could see the immense volume of work that has to be done with it and the number of deserving cases which, unfortunately, have to be turned down. When I say "deserving cases" I mean deserving cases of buildings.
The only point on which I disagree slightly with the hon. Gentleman is that


his two hypothetical cases were of people paying surtax. The hon. Gentleman knows as well as I do, because we have been on tours visiting houses, that many of the people who are trying their best to keep these houses in good repair because they are part of the superb architectural heritage of this nation, together with the cathedrals, churches, and other public buildings, are far from well off. As the hon. Gentleman said, stringent financial inquiries are made—and this is the answer to my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis)—and people who can really afford to do these repairs and restorations themselves are simply refused a grant. Indeed, if they are really rich they probably will not bother to apply for a grant because it involves conditions which some of them find rather troublesome, like having to open their houses several times a week, which some may not want to do.
Do the Government want these houses to be kept in good repair? There is the artistic point, which I have mentioned—and there is the architectural heritage, which I regard is immensely important. There is also the practical point, that these historic houses, so many of which are now open to the public, are a relatively new but increasingly important part of the general tourist attractiveness of this country. It is astonishing how many Americans and visitors from Europe and all over the world come to see these great and small houses, and it would be a great pity if my right hon. Fiend and the House were to turn down this very modest relief which applies to only a limited number of buildings. It is limited to the repair and restoration of buildings, and not to their every-day maintenance. I hope that my right hon. Friend will not say anything like that, because it is restoration and repairs that we are concerned with: we firmly refuse to recommend grants simply for maintenance. I hope very much that my right hon. Friend will be able to accede to this Amendment.

Mr. Julian Ridsdale: I wish to speak briefly in support of my hon. Friend the Member for Windsor (Sir C. Mott-Radclyffe). I wish to draw the attention of the House to the Local Authorities (Historic Buildings) Act, 1962, and the Local Government (Financial Provisions) Act, 1963, both of which

enable help to be given for restoration of scheduled buildings and historic buildings by grants or loans.
The difficulty I see at present, because of the financial policies of the Government, is that the money available for grants is very small indeed and this is making it difficult for those important buildings to be preserved as they should. The only other way money can be obtained is by a loan. The Government are empowered to give loans through these Acts, but are clawing bark the money by not allowing this as a deductible expense. It seems entirely wrong to me and, I am sure, to many people in the country.
This means that the Government, in order to preserve or to clear the present economic position, are allowing our heritage to be gravely impaired because they are not willing to allow the loans as a deductible charge. It is for those reasons that I wish to support the Amendment.

Mr. Robert Cooke: I also wish to support my hon. Friend the Member for Windsor (Sir C. Mott-Radclyffe), and I would also endorse what the hon. Gentleman the Member for Barking (Mr. Driberg) said. He speaks from great knowledge. Not only has he an historic building of his own which he makes available to thousands of visitors each year, but he also sits on the Historic Buildings Council and on the Historic Houses Committee of the British Travel Association, on which I have the privilege of serving with him. This Committee is concerned with the enjoyment of buildings restored by the help of the Historic Buildings Council.
When my hon. Friend the Member for Windsor gave his financial information and statistics, he made the point that it was the owner of the more modest house who would find himself in real difficulty. The big men, the big-time proprietors who hit the headlines, the proprietors of historic houses which have many other activities—and I will not advertise them by naming them—can write off the interest on borrowed money. Some of them receive grants because the cost of maintaining their building or of doing the necessary restoration work is prodigious. It is the smaller people who cannot do this. They are in the majority, and it is their houses which are more modest—and often more beautiful than the palatial residences—which will be lost, not


immediately, but will be run down over the years.
Anyone who has had anything to do with them will know that if one does not keep such a building in a reasonable state it can get into a state where it cannot be redeemed, and that is why these grants are given by the Historic Buildings Council. The Government support their policy and give money, but they are making it difficult in cases where they should be even more helpful to smaller people doing a fine job. The hon. Member for Barking spoke of the increasing number of people enjoying these buildings. They bring money in through tourism. I hope the Government will bear this in mind and give a favourable reply.

Mr. John Smith: This Amendment, among others, is a typical result of the ill-conceived nature of this legislation. The Government are trying to nobble speculators, but all that they appear to be doing is to encourage dry rot in historic buildings.
I support the Amendment. I have no objection to the Government's trying to stop speculation, but surely they can think of a way of doing it without encouraging dry rot in historic buildings?

Mr. Diamond: The more one listens to the hon. Member for Cities of London and Westminster (Mr. John Smith) the more one realises that however often he speaks one will never hear anything faintly comparable with dry rot.
I should like to express our appreciation to both the hon. Member for Windsor (Sir C. Mott-Radclyffe) and my hon. Friend the Member for Barking (Mr. Driberg) for the work they do on the Council. They need have no anxiety about being able to persuade me personally to recognise the value of its work and the great heritage this country has in its ancient buildings and their richness.
If my hon. Friend had not mentioned it, I would have added to the arguments of the hon. Member for Windsor that obviously these buildings are a great attraction to those from outside who have nothing like a tradition of this kind, and who rightly go to some of the less fre-

quented parts of the country to see some of the wonderful buildings and architecture. Nobody with the privilege of being the Member for Gloucester could fail to recognise the richness in his own constituency. There is no difference between us on the value of the work of the Council and those who serve on it, the grant that is paid, the wisdom with which it is used, and the wisdom of increasing it.
But that is not the Government's difficulty. The difficulty is that we have an Opposition who are most anxious that the Bill should be carried out logically. I find it very difficult to accept the whole of the words in the Amendment. I say "the whole", because it includes the words:
…carrying out any works for which a grant has been, or will be, given…".
The House knows now that the distinction is not whether or not a grant has been given, but whether or not the work is improvement. If it is, the interest on the loan will qualify for tax relief. I do not know whether the work is entirely or partly improvement. I suppose that it will vary from case to case. Where it is partly improvement and partly maintenance, repairs which merely restore but do not improve, it will have to be treated in the same way as repairs for all purposes. It would be impossible for the Government to signify their approval of the work of the Council and the need to maintain our historic buildings by giving special income tax treatment. The way for a Government to signify their approval is to give grants, which they are doing.
As regards income tax treatment, the house owner must comply with the law like any other taxpayer and get the benefit where the loan is for improvement, but not get it where it is not.
The point raised by the hon. Member for Windsor on the date of the grant is valid. It is not the date of the grant that matters; it is the date of the loan. But it is the same point here as in every other case where one draws a line based on a date. Those who come in before it are treated differently from those who come in after. That is in the nature of things, as when one changes the law from a certain date.
1.45 a.m.
It is true that a loan incurred prior to the relevant date will have interest which will rank for tax relief until 1975, whereas a loan incurred after that date will not, if it is a loan purely for maintenance and not improvement. I am sorry that I cannot recommend the House to accept the wording, although I think that a large part of the work that will be carried out will be work of improvement and as such any money borrowed will rank for tax relief.

Mr. John Smith: The Chief Secretary is under a misapprehension. It is not possible to get a historic building grant for improvement.

Sir C. Mott-Radclyffe: Will the Chief Secretary clarify a point. We are not dealing with a house assessed under Case 1 of Schedule D, which deals with businesses. Any loan for a business qualifies for tax relief. What we are dealing with are those houses where a loss is incurred under case 6 and can only be set against corresponding profit under the same section. It could of course be that someone might have a house in England running at a loss and one in Scotland running at a profit, but that is unlikely. I am not certain whether the Chief Secretary is right and that a loan, a portion of which is for improvement and a portion for maintenance of a house under case 6 would qualify for tax relief.

Mr. Diamond: Borrowing money for the purposes of a business is incurring a business expense. We are not concerned with that. I also confirm that whether it is a historic or non-historic house any loan incurred wholly or in part for the improvement of any property attracts tax relief on that part of the interest which represents the proportion of the loan attributable to the improvement.

Mr. Driberg: If my right hon. Friend is hinting, in a slightly encouraging way, that what we ask for may be covered in part by (2)(b), is there not some risk that (5) would cancel that out in respect of a good many, perhaps most, of the houses eligible for grant?

Mr. Diamond: It is because I could not be more specific that I had to leave myself to more general remarks. I listened carefully to the comments made by the two members of the Council and

it seemed that what they described was work which was partly improvement, partly repair. To the extent that it is improvement the loan will rank for relief; to the extent that it is not it will not, and that is the normal law. The real point that I am making is that I could not depart from the normal law for historic houses. If we want to treat them kindly, the way to do it is through grants, which is what the Government are doing.

Sir J. Foster: It is unlikely that restoration will be an improvement because the house was built in 1252. Everything done after that is by way of repair to bring it back to its original state. The layman thinks that a house with dry rot is improved by removing the dry rot; but common sense is not part of the law. One is merely restoring it to what it was before. This is the difficulty about the grants: they are always for repair purposes.
We might leave the thought with owners who cannot borrow that if they sell their house to somebody under an estate contract which is registered, and thus avoid stamp duty, they can take advantage of subsection (5), because all the repairs for which grant was payable when it belonged to somebody else would be eligible for deduction of income tax. If they have a son or somebody else is to get the house, they can avoid stamp duty by registering an estate contract. I leave that thought in the air.

Sir C. Mott-Radclyffe: I am not wholly satisfied with the Chief Secretary's reply, but I know that he has done his best to explain the Government's position. As this was an all-party Amendment, supported by hon. Members on both sides of the House, I beg to ask leave to withdraw it.

Amendment, by leave, withdrawn.

Mr. Higgins: I beg to move Amendment No. 119, in page 21, line 43, at the end insert:
(3) Subject to the provision of this section interest is eligible for relief under this section if it is paid by a person being the holder of a policy of insurance on his life which is a qualifying policy within section 16 of the Finance Act 1968 on a loan to defray money applied—
(a) in payment of any premium due there-under or a sum in lieu of such premium; or


(b) under a contract of loan for which the policy forms the security.
The purpose of the Amendment is to allow for tax relief loans which are made to pay a premium on an insurance policy or raised on the security of an insurance policy.
We have had the spectacle of the Chief Secretary gradually moving from one line of defence to another, producing at every stage a new principle which we had not heard about and throwing in the wastepaper basket the principles on which he had been defending his case. At various stages he has complained that he has not been able to be as logical as he might have been, but we have consistently argued that he can be logical only by throwing out the whole Clause. Nevertheless, there is a very strong case for his going one stage further, because this is essentially the line at which the battle is now being fought. This is the point—loans on insurance policies—at which he has not yet given way, and it is clearly the point on which he should next give way.
The arguments in favour of our proposal are overwhelming, even in the terms of the Chancellor's Budget speech. The right hon. Gentleman, before his peroration, extolled the virtues of saving and went on:
The new savings scheme I have just described is designed to encourage people to save rather than spend some of the money that they have earned. But it is also important, as part of the same approach, to discourage people from spending money they have not earned, or do not even possess."—[OFFICIAL REPORT, 15th April, 1969; Vol. 781, c. 1039.]
The essential point about insurance policies is that they are clearly an important form of saving. One of the major incentives for people to invest in insurance policies—in other words, to save —is the fact that they know, particularly with endowment policies, that it is likely that they will be able to raise money on the policy. If the Chancellor raises the cost of borrowing on those policies, it will be a discouragement to people to take out such policies and save. Therefore, it is wrong that he should act in the way that he has. It is contrary to his own policy
The Chancellor is wrong in saying that these people are borrowing money they have not earned and do not even possess. People with insurance policies are bor-

rowing money they have earned and possess and have invested in insurance policies. Therefore, the right hon. Gentleman should accept the Amendment. In many ways, people are borrowing their own money.
People may take out this kind of insurance policy but do not borrow until an emergency arises, or perhaps they say that they cannot continue the premiums for a short period. If this is so, it seems to us clearly desirable that people should be able to continue to maintain their insurance policies and, if necessary, borrow against them in order to keep the premiums going during a period of emergency. But the danger now is that, given an increase in the effective cost of borrowing, people faced with an emergency will surrender their policies, and the total savings will to that extent be reduced, rather than take out a loan to carry themselves over that emergency period.
It is true that the Government, adopting the position which the Chief Secretary has adopted, have given way on earlier Amendments relating to existing loans. None the less, the point on emergency borrowing, and other points, has not been covered by this so-called concession, so we think it essential that the Government should give way on this Amendment.
It is particularly important with regard to future loans—perhaps educational loans, or loans carried out by people going back to business school in an endeavour to get more technical education. I shall not weary the House with examples, which we have already discussed to some extent, but the fact is that the whole of this area is one in which the attitude of the Government is contrary to the overall policy.
We believe that the Chief Secretary, having really no point on which he can reasonably take a stand on any reasonably logical principle at all, ought to concede the Amendment. I hope that he will do so, but if he remains adamant I most certainly hope that my right hon. and hon. Friends will divide the House.

Sir J. Foster: If the Government were disposed to accept the Amendment we would probably need a manuscript Amendment to include exempt policies as well. Qualifying policies are those dated back to 1968, and it would be illogical to exclude those policies which qualify but are not qualifying policies.
The present position is a disincentive to saving. The amount of life assurance policies will undoubtedly diminish as a result, because a person will not be willing to pledge so much of his income if he feels that it is, so to speak, gone for ever unless he can surrender it or borrow at an excessive rate. Statistics obtained from the life offices show that the average loan is comparatively small—something under £400. This provision, therefore, does not hit the surtax payer but the man who meets with an emergency—who has to have some money, say, for an operation, for education fees, or the like.
That man is only borrowing back his own money. He is not creating any kind of income. He is not going in for any tax saving which is part of the philosophy, I understand, of Clauses 18 and 19. The man who takes out an insurance policy like this cannot realise his security as can the person who has borrowed to obtain shares. Surrender is very disadvantageous, and one does not want to see savings diminish, as they will, by large-scale surrender of policies.

2.0 a.m.

Mr. John Smith: Unless this Amendment is accepted the Clause will convert insurance policies into an exceedingly non-liquid form of saving. To get back any part one will have to abandon the whole method of saving. As such the method will be far more unsuitable for people of limited means than for richer people.
When arranging one's saving, one has to put the first tranche into an exceedingly liquid medium such as the Post Office Savings Bank. From then on the more one has the less liquid the form of saving it is reasonable to invest in. Unless the Amendment is accepted the Clause will discriminate in favour of the rich. I do not say that for the sake of effect but because it is true. All Governments have always by legislation and exhortation encouraged life insurance not only as a means of saving but as a means of conducting one's life in a sensible manner for oneself and one's dependants. I therefore hope that the Chief Secretary will accept this Amedment.

Mr. Diamond: This Amendment raises a very similar point to those raised in Committee. The arguments were then

fully deployed and the answer I gave then I am afraid I must give now. I cannot see that there is any difference in borrowing on an insurance policy and borrowing on any other kind of security such as stocks and shares. I cannot see why it should be thought that this should attract special treatment for tax.
I recognise that the case has been made mainly on the ground of the effect on the payer of a modest premium and that the borrowing would be only in proportion. The borrowing would be modest and the interest would be modest, but the tax on the interest would be even more modest. I do not recognise for a moment the force of the argument that because the tax would be one-third of 10 per cent. on a small amount per annum people would be discouraged from entering into insurance policies. Nor can I see the argument that, discouraging as the proposal in the Bill certainly is for people to realise their savings, it is a discouragement to saving.
On the contrary, if people are saving through insurance policies one wants to encourage them to go on saving. To encourage borrowing on an insurance policy is to discourage saving. It is part of the policy of my right hon. Friend to encourage saving. It is sensible that an insurance policy should be treated as security for a loan, but if it is there is no distinction to be drawn between that kind of security and any other. I am sorry to say in reply to the hon. Member for Worthing (Mr. Higgins), who suggested that I have moved my ground, that I am confronted by an excellent brief to reply to him, but it consists solely of what I said in Committee. Therefore, there is no better argument that I can produce.

Mr. Higgins: We do not accept the argument which the right hon. Gentleman has put forward in Committee and tonight. Tax relief on the interest on such a loan may seem modest but it will not seem modest to the person with an emergency to cope with. It will seem less modest for a person who, to maintain his policy, has to borrow to pay the premium. The whole point about the Amendment is that if a person has to surrender a policy the matter is at an end, but if he has the policy and can borrow money on it to pay the premiums


he can resume it when better times come for him. We do not accept the arguments put forward by the Chief Secretary either now or in Committee. I therefore hope that my hon. and right hon. Friends

Division No. 335.]
AYES
[2.4 a.m.


Alison, Michael (Barkston Ash)
Hall, John (Wycombe)
Onslow, Cranley


Allason, James (Hemel Hempstead)
Hall-Davis, A. G. F.
Orr-Ewing, Sir Ian


Astor, John
Hamilton, Lord (Fermanagh)
Osborn, John (Hallam)


Atkins, Humphrey (M't'n &amp; M'd'n)
Harris, Reader (Heston)
Page, Graham (Crosby)


Awdry, Daniel
Hastings, Stephen
Percival, Ian


Baker, Kenneth (Acton)
Hawkins, Paul
Pink, R. Bonner


Baker, W. H. K. (Banff)
Heseltine, Michael
Pounder, Rafton


Biffen, John
Higgins, Terence L.
Powell, Rt. Hn. J. Enoch


Black, Sir Cyril
Hiley, Joseph
Price, David (Eastleigh)


Blaker, Peter
Hill, J. E. B.
Prior, J. M. L.


Boardman, Tom (Leicester, S. W.)
Holland, Philip
Pym, Francis


Boyle, Rt. Hn. Sir Edward
Hordern, Peter
Ramsden, Rt. Hn. James


Braine, Bernard
Hornby, Richard
Renton, Rt. Hn. Sir David


Brown, Sir Edward (Bath)
Howell, David (Guildford)
Ridley, Hn. Nicholas


Bruce-Gardyne, J.
Hunt, John
Ridsdale, Julian


Buchanan-Smith, Alick (Angus, N&amp;M)
Hutchison, Michael Clark
Rossi, Hugh (Hornsey)


Burden, F. A.
Iremonger, T. L.
Royle, Anthony


Campbell, B. (Oldham, W.)
Jenkin, Patrick (Woodford)
Russell, Sir Ronald


Carlisle, Mark
Jones, Arthur (Northants, S.)
Scott, Nicholas


Chataway, Christopher
Jopling, Michael
Scott-Hopkins, James


Chichester-Clark, R.
Joseph, Rt. Hn. Sir Keith
Sharples, Richard


Clark, Henry
Kershaw, Anthony
Shaw, Michael (Sc'b'gh &amp; Whitby)


Clegg, Walter
Kimball, Marcus
Silvester, Frederick


Cooke, Robert
King, Evelyn (Dorset, S.)
Smith, Dudley (W'wick &amp; L'mington)


Crowder, F. P.
Kirk, Peter
Smith, John (London &amp; W'minster)


Cunningham, Sir Knox
Kitson, Timothy
Speed, Keith


Dalkeith, Earl of
Knight, Mrs. Jill
Stainton, Keith


d'Avigdor-Goldsmid, Sir Henry
Lane, David
Stodart, Anthony


Dean, Paul
Legge-Bourke, Sir Harry
Taylor, Edward M. (G'gow, Cathcart)


Deedes, Rt. Hn. W. F. (Ashford)
MacArthur, Ian
Taylor, Frank (Moss Side)


Drayson, G. B.
Maclean, Sir Fitzroy
Temple, John M.


du Cann, Rt. Hn. Edward
Macleod, Rt. Hn. Iain
Turton, Rt. Hn. R. H.


Elliott, R. W. (N'c'tle-upon-Tyne, N.)
McNair-Wilson, Michael
van Straubenzee, W. R.


Farr, John
Maddan, Martin
Waddington, David


Fisher, Nigel
Maginnis, John E.
Weatherill, Bernard


Fletcher-Cooke, Charles
Marten, Neil
Wells, John (Maidstone)


Fortescue, Tim
Maude, Angus
Whitelaw, Rt. Hn. William


Foster, Sir John
Maxwell-Hyslop, R. J.
Wiggin, A. W.


Gibson-Watt, David
Mills, Peter (Torrington)
Wilson, Geoffrey (Truro)


Gifmour, Sir John (Fife, E.)
Mills, Stratton (Belfast, N.)
Wolrige-Gordon, Patrick


Glover, Sir Douglas
Mitchell, David (Basingstoke)
Woodnutt, Mark


Glyn, Sir Richard
Monro, Hector
Worsley, Marcus


Godber, Rt. Hn. J. B.
Montgomery, Fergus
Wright, Esmond


Goodhart Philip
More, Jasper
TELLERS FOR THE AYES:


Goodhew, Victor
Morgan-Giles, Rear-Adm.
Mr. Reginald Eyre and


Gower, Raymond
Morrison, Charles (Devizes)
Mr. Anthony Grant.


Grieve, Percy
Mott-Radclyffe, Sir Charles



Gurden, Harold
Munro-Lucas-Tooth, Sir Hugh




Nott, John





NOES


Allaun, Frank (Salford, E.)
Bray, Dr. Jeremy
Dell, Edmund


Anderson, Donald
Brooks, Edwin
Dempsey, James


Archer, Peter
Brown, Hugh D. (G'gow, Provan)
Dewar, Donald


Armstrong, Ernest
Brown, Bob (N'c'tle-upon-Tyne, W.)
Diamond, Rt. Hn. John


Ashley, Jack
Brown, R. W. (Shoreditch &amp; F'bury)
Dickens, James


Atkins, Ronald (Preston, N.)
Buchan, Norman
Dobson, Ray


Atkinson, Norman (Tottenham)
Buchanan, Richard (G'gow, Sp'burn)
Doig, Peter


Baxter, William
Callaghan, Rt. Hn. James
Driberg, Tom


Bence, Cyril
Carmichael, Neil
Dunnett, Jack


Benn, Rt. Hn. Anthony Wedgwood
Carter-Jones, Lewis
Dunwoody, Mrs. Gwyneth (Exeter)


Bidwell, Sydney
Chapman, Donald
Dunwoody, Dr. John (F'th &amp; C'b'e)


Binns, John
Concannon, J. D.
Eadie, Alex


Bishop, E. S.
Dalyell, Tam
Edwards, William (Merioneth)


Blackburn, F.
Davidson, Arthur (Accrington)
Ellis, John


Blenkinsop, Arthur
Davies, G. Elfed (Rhondda, E.)
English, Michael


Booth, Albert
Davies, Dr. Ernest (Stretford)
Ennals, David


Boston, Terence
Davies, Rt. Hn. Harold (Leek)
Ensor, David


Boyden, James
Davies, Ifor (Gower)
Evans, Fred (Caerphilly)


Bradley, Tom
de Freitas, Rt. Hn. Sir Geoffrey
Evans, Ioan L. (Birm'h'm, Yardley)

Will suppot the Amendment in the Lobby.

Question put, That that Amendment be made:—

The House divided: Ayes 140, Nose 188.

Fitch, Alan (Wigan)
Lyon, Alexander W. (York)
Perry, Ernest G. (Battersea, S.)


Fletcher, Raymond (Ilkeston)
Mabon, Dr. J. Dickson
Perry, George H. (Nottingham, S.)


Fletcher, Ted (Darlington)
McBride, Neil
Price, Christopher (Perry Barr)


Foot, Michael (Ebbw Vale)
MacColl, James
Probert, Arthur


Ford, Ben
Macdonald, A. H.
Rees, Merlyn


Forrester, John
McGuire, Michael
Roberts, Rt. Hn. Goronwy


Fowler, Gerry
McKay, Mrs. Margaret
Roberts, Gwilym (Bedfordshire, S.)


Freeson, Reginald
Mackenzie Gregor (Rutherglen)
Rodgers, William (Stockton)


Gardner, Tony
Mackie, John
Roebuck, Roy


Gray, Dr. Hugh (Yarmouth)
Mackintosh, John P.
Ross, Rt. Hn. William


Gregory, Arnold
Maclennan, Robert
Rowlands, E.


Grey, Charles (Durham)
McMillan, Tom (Glasgow, C.)
Ryan, John


Griffiths, David (Rother valley)
McNamara, J. Kevin
Shaw, Arnold (Ilford, S.)


Griffiths, Eddie (Brightside)
Mahon, Simon (Bootle)
Sheldon, Robert


Hamilton, James (Bothwell)
Mallalieu, E. L. (Brigg)
Short, Mrs. Renée (W'hampton, N. E.)


Hannan, William
Mallalieu, J. P. W. (Huddersfield, E.)
Silkin, Rt. Hn. John (Deptford)


Harper, Joseph
Manuel, Archie
Silkin, Hn. S. C. (Dulwich)


Harrison, Walter (Wakefield)
Mapp, Charles
Silverman, Julius


Haseldine, Norman
Marks, Kenneth
Skeffington, Arthur


Hazell, Bert
Marquand, David
Small, William


Hooley, Frank
Mellish, Rt. Hn. Robert
Spriggs, Leslie


Houghton, Rt. Hn. Douglas
Mendelson, John
Summerskill, Hn. Dr. Shirley


Howarth, Robert (Bolton, E.)
Mikardo, Ian
Taverne, Dick


Howell, Denis (Small Heath)
Milne, Edward (Blyth)
Thomson, Rt. Hn. George


Hoy, Rt. Hn. James
Mitchell, R. C. (S'th'pton, Test)
Tinn, James


Hughes, Roy (Newport)
Molloy, William
Urwin, T. W.


Hunter, Adam
Morgan, Elystan (Cardiganshire)
Varley, Eric G.


Jackson, Colin (B'h'se &amp; Spenb'gh)
Morris, Alfred (Wythenshawe)
Wallace, George


Jay, Rt. Hn. Douglas
Morris, Charles R. (Openshaw)
Watkins, David (Consett)


Jenkins, Rt. Hn. Roy (Stechford)
Morris, John (Aberavon)
Watkins, Tudor (Brecon &amp; Radnor)


Johnson, Carol (Lewisham, S.)
Moyle, Roland
Wellbeloved, James


Johnson, James (K'ston-on-Hull, W.)
Murray, Albert
Whitaker, Ben


Jones, T. Alec (Rhondda, West)
Newens, Stan
Whitlock, William


Judd, Frank
Ogden, Eric
Williams, Alan (Swansea, W.)


Kerr, Mrs. Anne (R'ter &amp; Chatham)
O'Malley, Brian
Williams, Alan Lee (Hornchurch)


Kerr, Dr. David (W'worth, Central)
Oram, Albert E.
Williams, Clifford (Abertillery)


Kerr, Russell (Feltham)
Orme, Stanley
Williams, Mrs. Shirley (Hitchin)


Lawson, George
Oswald, Thomas
Willis, Rt. Hn. George


Leadbitter, Ted
Owen, Dr. David (Plymouth, S'tn)
Wilson, William (Coventry, S.)


Lee, John (Reading)
Page, Derek (King's Lynn)
Winnick, David


Lewis, Arthur (W. Ham, N.)
Palmer, Arthur
Woof, Robert


Lewis, Ron (Carlisle)
Parkyn, Brian (Bedford)
TELLERS FOR THE NOES:


Lipton, Marcus
Pavitt, Laurence
Mr. John McCann and


Lomas, Kenneth
Peart, Rt. Hn. Fred
Dr. M. S. Miller.


Loughlin, Charles
Pentland, Norman

Mr. Anthony Stodart: I beg to move Amendment No. 157, in page 21, line 43, at end insert:
(3) Subject to the provisions of this section, interest is eligible for relief under this section if it is paid on a fixed term loan obtained on or before 15th April 1969 on the security of agricultural or forestry property.
In considering this Amendment we must have in mind the terms of new Clause 28 which was accepted by the House yesterday. That Clause allows relief to be given for six years up to 6th April, 1975, in respect of interest on a fixed loan taken out on or before 15th April this year, namely, Budget day. The object of new Clause 28 was to allow those who had entered into firm commitments to adjust their affairs with more reasonable convenience than the original date of 5th April, 1970, would have allowed them. That was clearly a gesture by the Government, although we regard the principle underlying the Government's approach to this matter as being basically wrong. Therefore, my welcome to that

gesture must inevitably be somewhat less than warm.
2.15 a.m.
The Amendment is designed to allow for the special circumstances under which I believe agriculture and forestry operate. I am not a disciple of the cult of special pleading on behalf of either agriculture or forestry. My general outlook is that I am thoroughly in favour of these industries enjoying similar treatment to other industries getting similar returns for their efforts. But one cannot ignore the fact that the finance required for forestry operations is of the longest possible nature and that agriculture, although its various sectors differ, comes second in that category.
It is usual for loans to be taken out repayable over 20 years on both the Agricultural Mortgage Corporation and the Scottish Agricultural Securities Corporation. Indeed, a period of 40 years is by no means unusual. This is what puts these basic industries into a


category of their own, and the length of time involved is due to the fact that from trees one has planted last March there will be no income from thinnings for at least 15 years, while 10 years in farming is only two of the rotations which are still practised on many farms.
We have a situation in which interest on a loan taken out, for example, 20 years ago, and with 10 or even 20 years still to run, will be disallowed after April, 1975, unless it can be specified how the loan was used. If the loan has been applied to buying land or improving or developing it, the interest is unreservedly allowable. If, on the other hand, some of it has been used for maintenance or perhaps for paying estate duty or for some other purpose, clearly very intricate and elaborate calculations will have to be made, instigated by the inspector of taxes.
My experience from constituency correspondence is that the Inland Revenue is already hopelessly overburdened without having to delve into the past on a scale and over a length of time such as I have described. This, together with the long-term nature of forestry and agriculture operations and their financing, plus the encouragement which should be given to them as enormous potential import savers—and we tend to concentrate on this aspect of agriculture, forgetting the enormous amount of money spent on importing timber—justifies special consideration being given to these two industries, and that is why the Amendment has been put down.

Mr. Diamond: The hon. Gentleman wished us to have in mind that the money to which he was referring was being borrowed to be spent on agricultural and forestry property. The form of the Amendment is "on the security of" agricultural or forestry property. May I make the preliminary point that security is totally irrelevant to the purpose of the Clause? A loan can be secured in any way; what is of relevance is the purpose to which the loan is devoted. The hon. Gentleman is asking that where the loan is devoted to agricultural or forestry property it should rank for more than the five years proposed under the new Clause.
I recognise that there will be many loans in forestry which are needed for a long period. In fixing the five years we did not attempt to fix a period longer than the period for which a loan could be contracted. That would have been impossible. As the hon. Gentleman has said, loans may be for 20 years or 40 years, and it would be impossible to have a new system of disallowance of interest running side by side with a system of allowance of interest for 40 years, and expect the new system to be understood or even to become acceptable. A transitional period of five years to give people time to adjust is understandable, but a period of 20 or 40 years, or, as is proposed, an indefinite period, would be impossible.
The five-year period is not intended to be a period which will be longer than the loan, but is intended to be a period in which the borrower will have ample time to adjust his affairs. Five years is a long period for that. I do not know what each borrower will do; it will depend on the arithmetic and circumstances of each case, but each person will have nearly six years in which to prepare for the new set of circumstances. I cannot recommend to the House acceptance of the Amendment.

Mr. John Smith: The point of the Amendment is not so much to give people time to adjust their affairs. The type of loan covered by the Amendment is difficult to adjust, however long may be the period of adjustment—presumably most such loans will have been raised for the payment of estate duty. If they were used for improvement they would in any case qualify for allowance of the interest against tax. Most of the property against which such loans are secured is difficult to sell except as a whole. Therefore, if a person is forced to pay off such a loan, his only way of adjusting his affairs is to cease altogether whatever activity he is conducting with the property. That is not only an unfair state of affairs; it may also be undesirable. Both agriculture and forestry can be satisfactorily conducted only in units of a certain size. Unless the Clause is amended in the way proposed, it will surely have a number of effects which I am sure the Government do not intend and which are not at all desirable.

Amendment negatived.

Mr. Graham Page: I beg to move Amendment No. 241, in page 22, line 1, at end insert:
(a) to defray money applied in a purchase, improvement, development or payment described in that subsection which occurred prior to 15th April, 1969, or
(b).

Mr. Deputy Speaker: With this Amendment, we shall discuss Amendment No. 245, in line 7, at end insert:
'unless that other purpose is a deposit with a bank or an investment in a building society temporarily, pending readiness to fulfil any of the purposes described in the said subsection'.

Mr. Page: The House is well aware by this time that Clause 19(2) gives relief to interest upon a loan to defray money applied in purchasing land. The draftsmen of that subsection, or should one say the Government, have not made it clear whether the relief is to be given in respect of interest on a loan which is being used simultaneously with the purchase, or for a simultaneous purchase, or for a past purchase, or whether the subsection is meant to cover both circumstances. It is said to be a loan to defray money applied in purchasing land. The question is whether the money is being applied at that time or whether the money has been applied in the past in the purchase of land.
Subsection (3) says that if the interest is to have relief it must be on a loan in connection with the application of the money for the purchase, and the money must be borrowed either on the occasion of its use for purchase or within a reasonable time from that purchase. It is fairly clear—as clear as a Finance Bill ever endeavours to be—that for somebody who purchased a property a few years ago, having found all the money himself, and who now mortgages the property to borrow on it, no relief would be given for the interest paid on that loan.
My Amendment seeks to give relief in such circumstances where the property was bought in the past with the purchaser's own money and at a later stage the purchaser finds it necssary or desirable to borrow on the security of the property. Let me give a typical example of what I have in mind. A couple, having married a year or so ago, both then at work and earning, save some money and put down all or a substantial

part of the purchase money for their home. After a time the wife becomes pregnant and gives up her job, but in order to tide them over the birth of the first child, they borrow some more; they take a further advance on the security for the property, perhaps another 10 or 20 per cent.
As I read the Clause, interest on that further advance would not rank for relief as the Bill stands. I want it to rank for relief. The result of the Clause as it stands will be that the couple in my example will in the first instance try to borrow up to the hilt. They will borrow more than they need because they will be advised that, if they do not do so and find they nee da little more money in the future, the interest will not rank for relief on that further advance. Surely it is wise to encourage them not to take more than they need at the start, and then, when the wife is out of a job and having her children, they can borrow more and still get the same relief.
2.30 a.m.
Now I pass to Amendment No. 245, which is to add some wards at the end of subsection (3). That subsection says that the relief provision, subsection (2),
… shall not apply to a loan the proceeds of which are applied for some other purpose before being applied as described in that subsection.
In other words, there is no relief if the proceeds of the loan are applied for some other purpose before being applied for the purchase of land.
The Amendment seeks to modify that by saying that a couple shall not be deprived of relief if all that they have done is to put the money on deposit at a bank or with a building society. They will probably want to get their advance out of a building society, and it seems reasonable to let them deposit their money in that way.
The sort of example that I have in mind is where a purchaser is negotiating for the purchase of property, the negotiations fall through but, in the meantime, he has been able to negotiate a loan, perhaps from a relative, and has received the money. If the Clause remains as it is, it orders him to deposit that money on current account until he finds another property to purchase. Surely it is reasonable to put it where it earns a little interest, on deposit at


a bank, including the Post Office or Trustee Savings Banks or in a building society.
Under subsection (3), relief is granted in respect of the interest only if the loan is in connection with the purchase and either on the occasion of the purchase or within a reasonable time after it. I am not concerned in Amendment No. 245 with raising the money after the purchase. I am concerned with the man who has raised the money before the purchase, perhaps considering another property, the negotiations have fallen through, he has the money in hand, and still intends to go on and purchase. To tell him that he must not earn interest on that money in the meantime seems to be ridiculous, and therefore the slight modification that I suggest appears to be appropriate.

Mr. Diamond: Dealing with Amendment No. 241, I repeat what I said in an earlier debate. We are not concerned with the security on which the loan is obtained. The borrowing may take place on the security of the house. But the hon. Gentleman described the loan as one for the purpose of "tiding over" the couple concerned. I understand what he means. But tiding a couple over is not one of the purposes for which loan interest is treated as qualifying interest, and the fact that the money is borrowed on the property does not make it money borrowed for the purpose of improving property. Therefore, I regret that I cannot accept that Amendment.
I turn hurriedly to Amendment No. 245 and say to the hon. Gentleman that the temporary deposit of money in a bank or building society cannot be regarded as applying the money for any particular purpose. The money is just resting there. We do not require that it should be held in a pillow case pending deposit with the hon. Gentleman on the purchase of a property by one of its clients. The best way to answer this point is by using the now hallowed words: this Amendment is unnecessary.

Sir J. Foster: Is it unnecessary? I suggest that the Government are penalis-

(4) If and so far as a loan made by allowing the debtor to overdraw an account is applied in improving land or buildings (otherwise than by the construction of a building or part of a building) no relief shall be given in respect of interest on the loan falling due more than three years after the end of the year of assessment in which the loan is so applied.

ing the poorer man, the unsophisticated man, by preventing him putting his money in a more sophisticated form of investment which produces a higher rate. That seems bad luck on him.

I understand from the right hon. Gentleman that in a building society it is all right; that is not a purpose. How he arrives at that I cannot think, but we are grateful for it. Can the right hon. Gentleman extend that to explain that any money resting is money resting in an investment pending its application? In other words, if it comes under the definition of money supply, would that be all right? I should like to know where he stops. We must be grateful for the interpretation which includes a building society. But why not short-term Government loans, or whatever?

Mr. Diamond: The short answer is that I was asked to deal with the Amendment, and I have dealt with it.

Mr. Graham Page: I am obliged to the Chief Secretary for dealing with Amendment No. 245 in the way that he did. I accept his assurance that, in the cases which I had in mind, the relief will be given.
However, I am disappointed with his answer to Amendment No. 241. It seems wholly illogical that someone purchasing property who does not want all the purchase money advanced to him at that moment, but takes some of it at that time and at a later time takes the rest when he needs it, should not get relief on that second loan. That is the interpretation that the Chief Secretary has given to the Clause and I gather that is what he intends should happen. I can only warn him that it will cause considerable hardship to some people. It will not cause hardship to those who take too much credit, take more money than they need borrow when they purchase, and thereby put more money into circulation, which I should think that the Government would wish to stop.

Amendment negatived.

Mr. Diamond: I beg to move Amendment No. 216, in page 22, line 8, leave out subsection (4) and insert:

Mr. Deputy Speaker (Mr. Harry Gourlay): With this Amendment it will be convenient to take the sub-Amendment, in line 3, after 'building', insert
'or by carrying out an improvement to agricultural land'.

Mr. Diamond: The main purpose of the Amendment is to provide that relief for interest on a loan by way of overdraft which has been used for improvements of land or buildings is not to qualify for relief where the interest becomes payable more than three years from the end of the tax year in which the money is spent. I repeat, I am referring to an overdraft.
Improvements consisting of the construction of a building or part of a building are not affected, because borrowing for building, like borrowing for buying a house or land, cannot be expected to be paid off for a long time.
The case is different with borrowing for improvements, such as the installation of central heating. Borrowing for such a purpose ought to have been paid off within three years, and there is no reason why it should result in the borrower's being entitled to relief for interest on an overdraft of the relevant amount for ever.
This is the best that we can achieve for practical purposes of determining what would be an otherwise difficult matter. I hope that the House will regard it as a reasonable compromise.

Mr. Higgins: Before my right hon. Friend the Member for Grantham (Mr. Godber) comments on the Amendment, may I ask the right hon. Gentleman to tell the House the connection between subsection (4) which is being left out, and the subsection which is now being inserted?

Mr. Godber: I do not think that I need take long over the sub-Amendment, although it is a matter of some significance. After the rebuff that we had from the Chief Secretary on the agricultural point earlier, my hopes are not very high. This is a matter for which the right hon. Gentleman ought to provide here. He is, in this new subsection (4), taking away some of the assistance being given under subsection (2)(b). This subsection is of significant interest to agriculture. We can understand the right hon. Gentle-

man's desire to limit the provisions as he is seeking to do in the Amendment, but the words in brackets in the Amendment do not go far enough to safeguard the position in relation to agriculture.
The right hon. Gentleman has said that it is reasonable to allow loans for the construction of a building, or part of a building, to have a longer term because it would be impracticable to consider repayment within three or four years. If this is logical in relation to buildings, it must equally be logical in regard to a number of matters which are common practice in agriculture. One such practice is drainage. We heard earlier that land drainage is sometimes done at intervals of 100 years. This is by no means abnormal. The cost is high, and it should be spread over a longer period than three years. It must be spread over 15 to 20 years to be reasonable. This is the sort of term that is required if the cost is to be spread evenly before further drainage is necessary.
The same applies to water supplies, which are becoming increasingly important for irrigation which plays an important part in agriculture. The provision of reservoirs for irrigation is another aspect which is substantially costly, and where the costs should be spread over a much longer period. Farm roads are another example. There are many aspects to which this should apply, and that is why we have suggested the inclusion of the words
or by carrying out an improvement to agricultural land.
Lest the Government feel that this wording is spreading it too wide, I refer again to the normal definition of agricultural land in relation to agricultural holdings, to which I referred earlier. The 1948 Act says that agricultural land means
land used for agriculture which so used for the purpose of a trade or business….
If that definition is applied to the Amendment, it prevents any abuse of the type which the Government may have in mind in relation to the purposes for which they have moved the Amendment.
I am merely seeking to widen the Amendment to include a loan obtained for legitimate agricultural purposes, which could not reasonably be repaid over three or four years. I ask the Chief Secretary to consider this as at


least some concession to agriculture after the curt reply that he gave on a previous occasion

Mr. John Smith: I cannot see what business it is of the Government's whether a person takes borrowing by way of loan or overdraft. In the past, it has often been completely fortuitous whether a person has taken borrowing by way of loan or overdraft. To make it harder for them to do so by way of overdraft simply damages an extremely effective system which we have developed, far more than in any other country in the world, to our own advantage, namely, the overdraft system which makes a much more effective use of resources than any system based on loans. As the right hon. Gentleman is aware, taking money by way of loan increases the money supply more than taking money by way of overdraft, and it seems to me that pointless and unnecessary damage is done by the Amendment to a system which we have, and which many other countries envy.

2.45 a.m.

Sir C. Mott-Radclyffe: I have no wish to repeat what was said on the agriculture Amendments, but I must ask the Chief Secretary to hoist in the fact that on many agricultural estates it is fortuitous whether maintenance and improvements are financed by overdraft, mortgage or loan. It made no difference before this Bill. Long-term arrangements, once made, are difficult to get out of, and one cannot escape obligations under the Agriculture Act, 1947. A loan or grant, whether by overdraft or mortgage, does not solely apply to buildings. They may be buildings on farm A, or an access road on farm B, or fencing on farm C or drainage on farm D. Some of these may have to be done together and others may be separated over many years—that is what the maintenance of agricultural property means.
That is why this provision of only three years' grace to pay off the loan for relief on the interest does not make any sense at all in terms of agriculture.

Sir J. Foster: The difference between loan and overdraft is even more absurd, because a joint stock bank can be the one making a loan. If one is careful to go to a bank where one does not have an

account, and ask for a loan, one will get away with it.
This is not an argument to stop loans, but is discrimination against overdrafts, because an overdraft is only another way to make a loan. It is a fluctuating loan which goes up and down as one credits it. In countries like the United States, overdrafts are illegal and they would have a much better fiscal system if they allowed overdrafts. This stems from odd historical reasons.
The Chief Secretary should explain why he is discriminating against overdrafts and forcing people to lending and borrowing in a strained way, contrary to the economic well-being of this nation.

Mr. Diamond: The hon. Gentleman the Member for Windsor (Sir C. Mott-Radclyffe) referred to a person borrowing by overdraft and to entering into long-term commitments. I do not know quite what he meant, but presumably he was saying that borrowing by overdraft is long-term commitment. The distinction is that an overdraft is not and cannot be a long-term commitment. It is, by its nature, short term and is capable of being called in by the lender at short notice and of being repaid by the borrower at any time. That is not the case with a loan for a fixed term where the borrower can repay at any time but the lender must await the end of the period before calling in the loan.
That is the distinction one draws and there is great inconvenience in dealing with an overdraft. As the hon. and learned Member for Northwich (Sir J. Foster) said, it is wobbling up and down and is not in the nature of a fixed loan and one cannot make the calculations upon it.
This is a reasonable way of dealing with the matter—

Sir Douglas Glover: rose—

Mr. Diamond: If the hon. Member will allow me, I will first respond to the debate. I was asked about Clause 19(4). That is now to be found in new Clause 29(3).

Sir D. Glover: The right hon. Gentleman the Chief Secretary is not quite correct. There are many instances where a person goes to a bank which gives an


overdraft on an agreed basis of two or three years.

Mr. Diamond: The hon. Gentleman has confirmed what I was saying. He talked about two or three years.

Mr. du Cann: We can all see the distinction the Chief Secretary is drawing between an overdraft and a loan. Of course, the two things can be—I do not say that they always are—very different. But the point we were putting to him was rather different. It was, why does he draw the distinction at all?

Mr. Diamond: We are drawing the distinction because interest payable on an overdraft ranks for relief in the normal case until 30th June this year. Interest on a fixed loan ranks for relief until 1975. The second is a long-term commitment and the first is not. In the second case it is right to give the person concerned a longer time to adjust his affairs. If the right hon. Gentleman wants to persuade me that that was wrong I shall listen with sympathy, but I do not think that he does.
The main point, which was not contained in the words of the Amendment, though that is nothing we should bother about, was that of the repairs referred to some would be substantial and some would not. I think that the hon. Gentleman said that the cost of the substantial ones should be spread over a longer period. I was more concerned to find out from him what would be a reasonable period in practice for the borrower to repay the loan, not the period over which the cost should be spread. He is putting to me that beyond what has been provided for here there are things like drainage schemes which are quite substantial, that although they are maintenance they necessitate borrowing which must be repaid over a longer period than that for which provision is made. That is something of which I must take note. There is no intention to disregard it. I cannot take note of it in this Bill, and I am not sure that it is something which will prove to be a difficulty or hardship. I promise him that I will give it consideration during the coming year, and see whether difficulties arise. If they do, I shall hope, without making a specific promise, to bring something before the House in a year's time.

Mr. Godber: May I say "Thank you" for at least this small concession, which may be of some help to us.

Amendment agreed to.

Mr. Deputy Speaker: The next Amendment is Government Amendment No. 275, with which we may discuss Amendments No. 141, in page 22, line 26, after which', insert:
'has either both of the following dimensions—
(a) an overall length (excluding any drawbar) exceeding 22 feet;
(b) an overall width exceeding 7 feet 6 inches
or'.

No. 142, in page 22, line 35, after 'subsection', insert:
'"overall length" and "overall width" shall have the meanings respectively assigned to them in Regulation 3 of the Motor Vehicles (Construction and Use) Regulations 1966 and".
and Government Amendments No. 276 and 277.

The Minister of State, Treasury (Mr. Dick Taverne): I beg to move Amendment No. 275, in page 22, line 26, leave out 'which' and insert:
'but, unless it is a large caravan, no relief shall be given by virtue of this subsection in respect of the payment of any interest unless—
(a) the caravan'.
The Amendment deals with the change asked for by the hon. Member for Wan-stead and Woodford (Mr. Patrick Jenkin). I said when he raised his points in Committee that I would consider them. I saw the Caravan Council and was persuaded by it and the hon. Gentleman that this was a change worth making. I am satisfield that it excludes touring caravans. It includes a number of residential caravans in respect of which there might otherwise be some difficulty, because while they are rateable they are not necessarily rated and therefore there would be some difficulty in obtaining relief.

Mr. Patrick Jenkin: II is right that we should express gratitude for the acceptance of an Amendment, not only in substance, but in every single detail, as we put it forward in Committee. It would be right too, to pay tribute to the National Caravan Council which was very quick off the mark and which has clearly helped to right what would have


given a serious injustice in the Bill as originally drafted.

Amendment agreed to.

Further Amendments made: No. 276 in page 22, line 30, leave out from 'Ireland' to last 'the' in line 31 and insert 'and'(b)'.

No. 217 in line 44 leave out subsection (9).—[Mr. Taverne.]

Mr. Taverne: I beg to move Amendment No. 218, in page 23, line 19, leave out subsections (11), (12) and (13) and insert:
(11) Subsection (2)(a) above shall not apply—
(a) where the seller and purchaser are a husband and his wife, and either sells to the other, or
(b) where the purchaser, or the wife or husband of the purchaser, has, since 15th April, 1969, disposed of an estate or interest in the land in question and it appears that the main purpose of the disposal and purchase was to obtain relief in respect of interest on the loan, or
(c) where the purchasers are the trustees of a settlement, and the seller is the settlor, or the wife or husband of the settlor, and it appears that the main purpose of the purchase is to obtain relief in respect of interest on the loan, or
(d) where the purchaser is directly or indirectly purchasing from a person connected with him, and the price substantially exceeds the value of what is acquired,
and subsection (2)(b) above shall not apply where the person spending the money is connected with the person who, directly or indirectly, receives the money, and the money substantially exceeds the value of the work done.
For the purposes of this subsection—
(i) references to a husband and wife are references to a husband and his wife living with him,
(ii) any question whether a person is connected with another shall be determined in accordance with paragraph 21 of Schedule 7 to the Finance Act 1965.
This Amendment leaves out three subsections now dealt with in new Clause 29. Secondly, it introduces some of the anti-avoidance provisions previously negatived in Committee. The Amendment is directed at the exploitation of Clause 19 by transactions which, in form, are a purchase of an interest in property but which, in fact, are designed to obtain tax relief for loans for other purposes. When the previous Amendments were moved there were a number of criticisms. In particular, there was one which seemed to be a telling one, made by the

hon. and learned Member for Northwich (Sir J. Foster), that the Revenue might have regard to any case where someone had sold any land, not just the case where he bought back his own. The words "any other land" have been omitted from the new draft.
The Amendment is now restricted to the sale by one spouse to another, where they are living together—and this is the test the Revenue is to have regard to in any claim for personal allowances—to purchases of a house which has previously been sold, where the main object is to get the relief, sales within settlements, where the main purpose is to obtain relief, and sales between connected persons. The last point was also criticised by the hon. and learned Gentleman. The two conditions have to be fulfilled. Not only has it to be a transaction between two connected persons, but also one for an inflated price.

Amendment agreed to.

Further Amendment made: No. 277 in line 36 at end insert:
'large caravan' means one which has either or both of the following dimensions—
(a) an overall length (excluding any drawbar) exceeding 22 feet;
(b) an overall width exceeding 7 feet 6 inches
where 'overall length' and 'overall width' have the meanings given in Regulation 3 of the Motor Vehicles (Construction and Use) Regulations 1966.—[Mr. Taverne.]

Clause 21

SPECIAL PROVISIONS FOR CERTAIN CLOSE COMPANIES

Mr. Diamond: I beg to move Amendment No. 47, in page 25, line 1, at beginning insert 'Subsection (1) of'.

Mr. Deputy Speaker (Mr. Harry Gourlay): It would be convenient if we also discussed Amendment No. 264, in page 25, line 5, at end insert:
'or
(d) if it is a property investment company or investment company and owns directly or indirectly fifty-one per cent. or more of the ordinary share capital of other property investment or trading companies which are or will be in receipt of estate or trading and/or investment income'.
and Amendment No. 265, in line 6, at end insert:
(2)A. (a) The expression 'substantially the whole' as referred to in subsection (2)(c) of


this section shall mean fifty-one per cent. or more.
(b) The expression 'property investment company' as referred to in subsection (2)(d) of this section shall mean a company that holds land or an interest in land which is in receipt or will be in receipt of estate income.
and Government Amendments Nos. 48, 49, 50, 51.

Mr. Diamond: This Amendment excludes the parent companies of property holding groups from the scope of the Clause. This was an undertaking given in Committee and I hope that the proposals meet with the wishes of the Committee.
Clause 21 provides, in the circumstances about which we know, that interest paid by companies has to be apportioned to shareholders and charged to surtax so as to prevent the avoidance of surtax by the other simple device of setting up a close investment company and borrowing money with which to buy securities. The Clause does not apply to close trading or property companies. Parent companies of close trading groups are also excluded, but there is no equivalent exclusion for the parent companies of close property groups. This series of Amendments deals with that. I will leave it at that and listen to what hon. and right hon. Gentlemen have to say.

3.0 a.m.

Sir J. Foster: Does the Chief Secretary think that the mischief aimed at in Amendments Nos. 264 and 265 is cured? It is difficult to follow how the Amendments work. The object of Amendment No. 264 is to take a property investment company which is defined in Amendment No. 265 and notice that it holds land or an interest in land in receipt of estate income. Therefore, it does not come within the definition of subsection 2(c) of the Clause. One started with a property investment company in which the estate income is not substantially the whole, but the justification for doing that is that the property investment company which the Amendments have in mind owns 51 per cent. of one or more property investment companies and will be in receipt of the estate or trading or investment income from companies lying underneath.
in drafting the Amendments it seemed to us that if the estate income in the subsidiaries was pushed up in the form

of dividends the property investment company which should be included in the relief would not be included because its income would not be estate income but dividend income. Does the Chief Secretary think that the problem is solved by the Amendments? If not, is it not right that this kind of company should be included? If, ex hypothesi, property investment companies lying below the limit do not benefit from the exemption because they come up in the form of dividends or come forward in the form of subventions, that would not satisfy the criteria.
The Amendment is not perfect because when we push it up perhaps there should be "substantially the whole". The Amendment might be interpreted as meaning that if all the property investment companies below did not add up to "substantially the whole" in the top company it might be said that it was contrary to the spirit of the Clause. I would be prepared to agree that one should ensure that when dividends are pushed up which represent estate income the top company should be "substantially the whole" of estate income as expressed in the Amendments.

Mr. Graham Page: We argued about "substantially the whole" when dealing with an earlier new Clause. What I said then applies in this case. It will be extremely difficult to interpret the meaning of "substantially the whole", but the point is that a different rule should apply to the property holding company, the parent company. When the dividends are passed up from the subsidiaries, surely it is sufficient to cover those or substantially the whole of the income of the subsidiaries without applying that rule to the parent company. There would be no mischief in fixing a percentage for the parent company such as is seen in Amendment No. 264.

Mr. Diamond: I gather—but I should not like to stake my life, on it—what is being put to me. I gather that we are in broad agreement about our proposal, but that there is difficulty in feeling certain that the character of the dividends coming up from the subsidiary companies can be defined.
The hon. Gentleman the Member for Crosby (Mr. Graham Page) is anxious about the phrase "substantially the


whole," as he was on an earlier occasion. On that earlier occasion I acceded to his pressure that I should define the phrase a little more precisely, and referred to something well in excess of 75 per cent. But that sort of definition would be inadequate on this occasion, in my view, because what one is giving here is a blanket exclusion, and if one is giving a blanket exclusion one wants much more than a 51 per cent. character or nature of the dividends coming up. One would therefore want something that was substantially the whole, or practically the whole, in order to justify the blanket exclusion to which I have referred.

Mr. Graham Page: I am not quite sure whether the right hon. Gentleman is talking about substantially the whole of the income of the subsidiaries or of the parent company. He is tempting me to ask him again what percentage he has in mind. He said earlier in dealing with a new Clause that it would have to be substantially more than 60 per cent., and now he says substantially more than 75 per cent. Where is he going—up to 99 per cent.?

Mr. Diamond: I do not think that 99 per cent. is a very bad figure here. It would qualify as being substantially the whole.
I think that we are in broad agreement. I have taken the point. I understand what the hon. and learned Member for Northwich (Sir J. Foster) suggests. I think that the sensible thing to do in the circumstances would be for him to be good enough to allow me to read very carefully what he has said, and to write to him if necessary—the point does not call for any Amendment in the Bill now —to make sure that I was acting reasonably.

Sir J. Foster: There are two aspects which the right hon. Gentleman must consider. First of all, there is the percentage shareholding which the parent company must have to make the subsidiary company a subsidiary. That is not necessarily substantially the whole, which is another point. Having got the subsidiaries, one pushes up the dividends. Then there comes the question of how much of the total income of the superior, top holding company should constitute estate income, and then, somehow—perhaps by extra-

statutory concession, of which I disapprove, because there are so many such concessions—to say that the dividends pushed up will constitute estate income.

Mr. Diamond: I was not necessarily leaning towards an extrastatutory concession: it would be wrong for the hon. and learned Gentleman to read that into my remarks. I was saying that I hoped that he would allow me to read very carefully what he had said, in order to make sure that I was fully seized of the points he had made.

Amendment agreed to.

Futher Amendments made: No. 48, in page 25, line 5, after 'is', insert
'of one or more of the following descriptions, that is—
(i)'.

No. 49, in line 5, at end insert:
'(ii) interest, and dividends or other distributions, received from a subsidiary which is itself within paragraphs (a), (b) or (c) of this subsection'.

No. 50, in line 6, at beginning insert 'Subsection (1) of'.

No. 219, in line 8, after 'above', insert 'or section ("loans made on or before 15th April 1969") of this Act'.—[Mr. Diamond.]

Mr. Graham Page: I beg to move Amendment No. 243, in page 25, line 11, at end insert:
'or
(c) to interest, the payment of which is enforceable against the company under the terms of a mortgage, a debenture or other similar charge entered into prior to 15th April 1969 and containing provision that the principal money secured thereby will not be repayable until the expiration of twenty years from the date of the making of the loan in respect of which the interest is payable'.
As a major concession from this side of the House I suggest that this Amendment may be discussed with Amendment No. 244, in line 11, at end insert:
(4) This section shall not apply to a company if twenty-five per cent. or more of such of its issued share capital as carries voting power has been allotted to or acquired by the public unconditionally and is so held at the relevant time and if such share capital has within twelve months preceding 15th April 1969 and subsequently been the subject of dealings on a recognised Stock Exchange in the United Kingdom.
The Amendments deal with different points but they are in the same context. They refer to the end of subsection (3) but to put them into context, I refer to


subsection (1), which explains what the Clause is about. The subsection says:
all interest paid by a close company in any accounting period shall be apportioned under section 78 of the Finance Act 1965 (apportionment for surtax) as if the interest were income of the close company".
We are not dealing here just with relief in payment of interest—that is, making a deduction from taxable income—but with the apportionment of income among participators for the purposes of surtax. To put it fully on the record, I take the first three lines of Section 78 of the 1965 Act, which says:
Subject to the provisions of this subsection, the income of a close company for any accounting period may for the purposes of surtax be apportioned by the Board among the participators,…
That is what we are talking about in Clause 21 and it is not quite the same as the contents of Clause 19.
Amendment No. 243 is intended to remove from the interest to be apportioned for surtax purposes where there is a pre-Budget obligation to pay. This is very much the same as new Clause 28 which, speaking from memory, I think went on to the Notice Paper before this Amendment. The new Clause deals with relief in respect of payment of any interest and seems by those words to refer to Clause 19 rather than Clause 21. It does not seem to deal with apportionment for surtax. It may be that the point is covered by Clause 21(3)(a), which says:
This section shall not apply—
(a) to interest which would be eligible for relief under section 19 above if paid by an individual,
I hope that once again the Chief Secretary will be able to tell us that it is all quite all right in the Bill and what I am seeking to do is there already now that we have new Clause 28 and if there is a pre-Budget obligation under a loan to pay interest that is taken out of Clause 21.
Amendment No. 244 seeks to exclude from the effect of Clause 21 and the apportionment for surtax purposes a certain type of close company. Subsection (2) already excludes certain companies as they are defined but there will be a number of close companies which will not fit in with any of those exclusions. Some will not fit in with the phrase "substantially the whole", with overseas

subsidiaries and so on. By Amendment No. 244 I am seeking to exclude what I call the public close company. I need not go into all the definition set out in the Amendment, but it is to exclude a further type of public close company which it defines.

3.15 a.m.

Mr. Diamond: I can help the hon. Member for Crosby (Mr. Graham Page) by saying that in general terms—I would not be too specific about it—Amendment No. 243 is unnecessary. What the hon. Gentleman was asking was whether the six-year period applies to the Clause. The answer is that it does by virtue of Amendment No. 219, to which the House has just agreed. That covers the essential point which was in the hon. Gentleman's mind on Amendment No. 243.
I think what the hon. Gentleman is suggesting by Amendment No. 244 is a reversion to the pre-1966 percentage for the purposes of the exemption from the Clause. Under the ordinary close company rules the percentage would otherwise remain at 35. This is an Amendment which I could not accept. I do not think there is any real justification for the hon. Gentleman's anxieties. I will carefully consider what he has said, but I do not think I can advise the House to accept the Amendment, as things stand at the moment.

Mr. Graham Page: I am grateful to the Chief Secretary for saying that what I sought to do by Amendment No. 243 appears to be covered, except that I included the longer period of 20 years obligation. If the six years covers it, that seems to be satisfactory.

Amendment negatived.

Amendment made: No. 51, in page 25, line 33, at end insert:
'and for the purposes of this section—
(a) "distribution" has the same meaning as in Part IV of the Finance Act 1965,
(b) the question whether a company is a subsidiary of another company shall be determined in accordance with paragraph 9 of Schedule 12 to the Finance Act 1965.—[Mr. Diamond.]

Further consideration of the Bill, as amended, adjourned.—[Mr. Roy Jenkins.]

Bill, as amended, to be further considered this day.

APPLE IMPORT LICENCES

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Concannon.]

3.18 a.m.

Mr. George H. Perry: I apologise for delaying the House still further at this very late hour. I only hope that I shall be able to stay awake and make my point.
My hon. Friend the Minister of State knows that I became interested in this subject as long ago as October, 1967, when I first contacted his immediate predecessor on behalf of a friend of mine of very long standing. On that occasion I was shuttled back and forth between the Board of Trade and the Ministry of Agriculture, Fisheries and Food for some time and succeeded in getting nowhere very quickly. I tried again in October, 1968, and again made no progress.
In June of this year I put the case in the hands of my right hon. Friend the Member for Belper (Mr. George Brown), in whose constituency my friend now lives. My right hon. Friend told me that until he went into hospital on 3rd July he had been having a battle with the Board of Trade on this question. The day before he entered hospital my right hon. Friend said to me, "I am afraid I got nowhere. They are not prepared to move a hand". My right hon. Friend sent me copies of correspondence he had received from the Board of Trade, including the minutes of a meeting between himself and the Minister of State as long ago as June of this year.
My right hon. Friend has given me carte blanche to carry on during his absence in hospital. I am still very concerned that the answers given to us over the past 18 months or two years are contradictory, ambiguous or somewhat vague. Is my hon. Friend the Minister of State aware of the full significance of his information to me that the Department has issued as many as 300 apple import licences as at 1st July this year? I have made investigations, and my information is that it is quite possible that over 50 per cent. of those 300 licence holders belong to three small groups. My observations in the East Midlands lead me to the conclusion that in Nottingham,

for instance, 28 per cent. of the market space is occupied by Dutch and American interests. The same applies in Derby, with 35 per cent. Leicester, 48 per cent. Wolverhampton, 65 per cent., with the space in the markets there occupied by two firms which are actually foreign interests trading under the name of old family concerns.
This sort of thing is happening all the time. Down the years, the name of Johnson Brothers has been known as that of an established business, but now, although the name still obtains, the firm is controlled from outside. Almost every week a firm is taken over in these localities by one of the large combines, the faceless men who never see an apple. They do not know what an apple looks like, yet they are allowed to make vast fortunes through being given licences.
The public are being fleeced every week, being almost bled white and exploited by these people who just want to make vast sums of money. Does the Board of Trade know what is going on in this sector of the distributive trade in this country? It seems to me that Lord Thomson's words could apply here. These are not just apple import licences; they are more like licences to print money.
My constituent and friend, now the constituent of my right hon. Friend the Member for Belper, could not be granted a licence. We were told that the reason was that he does not already hold a licence or he does not import goods at the present time. It is possible to import Australian apples, but one cannot import goods from the Continent without a licence. This is the off-season, but my friend tells me that he can buy a 40-lb box of apples at Southampton docks for 28s. Transport to his own town in Derby is 2s. That is 30s. for the 40-lb box. Yet when he goes to buy them from one of these firms with an import licence, as he has to do to carry on his trade, he has to pay as much as 60s. or 70s. for it—a box of French golden delicious or some such. He then has to add his profit, as he is entitled to do, to earn a margin to pay his staff and meet his rates and taxes. The price to the public can sometimes be 1s. 3d. for a single apple, or 3s. 9d. a pound. One apple has cost as much as 1s. 10d.
This is the way the housewife is being fleeced, because certain firms have a stranglehold on the market. I very much hope that my hon. Friend the Minister of State can answer my questions and give some assurance through me to my long-standing friend.

3.23 a.m.

Mr. John Wells: I follow the hon. Member for Nottingham, South (Mr. George H. Perry) in a more general sense. He has rightly raised the case of his former constituent, but I wish to develop the generality of the matter which he has raised.
In recent weeks there has been a reallocation of apple licences. My complaint would be more at the attitude of the Board of Trade in this reallocation. There was a massive reallocation in 1967, which was then, reputedly, to last for many years. It was said to be a major change. Why, then, do we need another major change only two years later, and, if we are to have such a major change, why has there not been a much closer examination of the bona fide trading credentials of those who have applied? This is where the House must be grateful to the hon. Member for Nottingham, South, for raising this subject.
There are people who have applied for licences and, for all I know, have been granted them, and who have done little bona fide trading in apples. They have been trading in other imported horticultural commodities and in order, as it were, to round off their portfolio and make themselves more attractive to trade, they have wanted apple licences. I hope that if there is to be a further reallocation at some future date there will be far greater consultation with the trade. The Minister of State has a good reputation in the House for his fairness and accessibility and his ease of personality, but I remind him that he was less than gracious to the deputation which waited upon him. Hon. Members who know his amiable reputation were surprised by the brusque handling of the existing licence holders, who felt very aggrieved about it.
This matter is bound to be looked at again. The 1967 review was meant to last a long time but was rethought in a couple of years. I ask him, when the matter is reviewed again, to pay

closer attention over a longer period to the representations of the bona fide trade and to see that licences are given to the bona fide traders. We all know that licences should not be given for all time, that there should be a flow. We appreciate that times change, but I hope that the Minister of State or his successor—who, I hope, will be drawn from this side of the House—will listen to the trade rather more closely.

3.27 a.m.

The Minister of State, Board of Trade (Mr. Edmund Dell): I at once respond to what the hon. Member for Maidstone (Mr. John Wells) has said about my treatment of representations from the existing licence holders. His remarks were completely unjustified. I am grateful to him for his compliments to me but to suggest that I was brusque with the licence holders is totally unfounded.
What happened was that officials of the Board of Trade held discussions over a long period with the representatives of the fruit trade. One section of the trade subsequently, because it was not satisfied with the way the officials had accepted its arguments, asked to see me. I saw representatives of that section and we had a discussion which I thought was fruitful, following which that section put up to the Board of Trade certain proposals for reallocation. The Licence Holders' Association, which had also had discussions with my officials over a very long period, then also asked to see me. It was indicated to it that it had already presented its arguments and that if a review was to take place by 1st July a decision was likely to follow rapidly after its representatives had seen me. Nevertheless, I added that if they wished to see me personally, they could, and we arranged on that basis for them to come to see me.
Some of them came to see me and I listened to their arguments and I think that I made it clear to them that, although I had taken note of the arguments, which had already been presented to my officials, I could not guarantee that these would lead to any holding up of the reallocation. In fact, we decided to go ahead with the reallocation a few days later. I see no reason for complaint. They could have asked to see me earlier and I would have been prepared to meet them earlier.

Mr. John Wells: The 1967 allocation was held up as the great allocation to last for many years. Why the haste within two years? The hon. Gentleman says these people could have seen him sooner. Two years is a very short time.

Mr. Dell: I am simply answering the remarks made by the hon. Member about the way in which I received the delegation which, if I may say so in my own defence, were completely unjustified.
I will now come to the basic question of why the Board of Trade decided to carry out this reallocation. Although he welcomes the initiative of my hon. Friend the Member for Nottingham, South (Mr. George H. Perry), the hon. Member for Maidstone is on a different side of the issue. The hon. Member for Maidstone does not want a further reallocation. My hon. Friend wants a far more radical reallocation than has occurred. Although they both welcome the fact that the point has been raised, they are arguing from a different point of view.
I welcome my hon. Friend's initiative in raising the matter because it represents to the House and to the public something which certain of those from the trades who made representations to me refused to believe, and that is that there was pressure from hon. Members and from people outside for a reallocation.
The purpose of import licensing is, of course, to keep the amount of imports from the restricted sources within a certain ceiling. Unfortunately, however, the technique used of issuing licences to individual importers inevitably means that we also decide the amount of trade which individual importers can do; we decide, that is, the distribution of the trade between different traders. Our objective here, and I am sure that the House will agree that this is the right objective, is to interfere as little as possible with the way trade would have been distributed between individuals in the absence of restrictions. What we have to do, therefore, is to try to find some criterion by which to judge what the distribution of trade would have been in those circumstances.
In a situation in which imports of a particular commodity are restricted for the first time, the obvious way of doing

this is to take the distribution of the trade as it existed immediately before the imposition of restrictions. This is, for example, largely what was done in 1951 when, after a short period during which there were no restrictions on imports of apples and pears from non-dollar sources, such restrictions were reimposed in November of that year.
As time goes on, however, the continued use of an historical period of that sort clearly becomes less and less defensible. It freezes trade in a pattern which becomes increasingly artificial, and it is unfair. It is unfair to new firms who would otherwise have entered the trade; it is unfair to firms already in the trade who, because they are more enterprising and efficient, would otherwise have increased their share in the trade. It is unfair; and it also leads to abuses. Because of the restriction, licences are valuable and are worth money. That is the point made by my hon. Friend the Member for Nottingham, South. To continue an inflexible system of allocation that has no regard to the way the importing trade is developing generally is to invite abuse of the system. A situation inevitably arises in which we get not just trading in licensed apples but also trading in the licences themselves.
The problem of remedying this situation lies in the difficulty in finding some criterion, other than trade in quota apples before the restrictions were imposed, by which to assess the trade which individual companies would be doing if there were no restrictions. In the case of apples, we can get some guidance at least from trade in other fresh fruit.
There are very few traders who would in ordinary circumstances be importing only apples, and only apples from the sources to which the restrictions apply —I should perhaps remind the House that apples from the sterling area are admitted without quantitative restriction. They will normally be importing other fresh fruit also, for example, apples from the sterling area, pears, peaches, citrus and so on. The size of the trade they do in this unrestricted sector is certainly no perfect guide to the trade which they would be doing in apples had there been no restriction. It is, however, some indication, and I think the only one we can at present turn to.
That is why, when a measure of reallocation was introduced in 1967, a part of the allocation was based on imports of apples from non-quota sources, and imports from the major quota countries of other fresh non-tropical fruit. The main part of the allocation—80 per cent. in fact—was, however, still based on imports of quota fruit, and since these imports were necessarily limited by the licences each trader had, this meant that 80 per cent. of the allocation was still based on the trade which had taken place very many years before.
That is why earlier this year we felt the time had come to examine the possibility of making a further change in the allocation. We were influenced in this matter by an increasing volume of representations—to the Board of Trade and to the Ministry of Agriculture—that the new allocation was still unsatisfactory. It allowed insufficient scope for new traders to enter the trade, and for the more enterprising existing traders to expand theirs, and, it was alleged, trading in licences, even if carried out in forms which made it very difficult to detect, was still continuing on a sizeable scale.
The conclusion we came to was that it was wrong to continue an allocation still so very heavily based on trade done partly in 1951 and partly in 1936–39, and that some further change was needed. What we have done is in large part to repeat the procedure used in 1967 but to carry it further in two respects. First, a smaller part of the reallocation—70 per cent. as compared with 80 per cent. in 1967—has been based on trade in quota fruit and a larger proportion—30 per cent. compared with 20 per cent.—has been based on imports of other fruit. Secondly, whereas in 1967 we based this second part of the allocation on imports of non-tropical fruit from our main apple quota suppliers only, this time we have cast the net wider and used imports of such fruit from all sources. I will not go into all the details of the system used. These are complicated and it would take more time than is at my disposal to deal with them adequately. There is no question of people who are not bona fide importers qualifying under the system. I will, therefore confine myself to a few general points.
First, I would like to explain that we have consulted with the various trade

associations who represent the interest of importers in this field. It is fair to say that, while the views of traders were divided, the majority certainly were against any further reallocation. It would not, however, have been right to have settled this matter solely on the basis of the majority view inside the trade. We had to take account also of the minority view. We had also to take account of interests outside the importing trade who are affected by the way the importing trade works—I have in mind, for example, the retail trade and indeed the consumer. I should, however make it clear that the consultations we had with the importing trade were not just a sham and that we had careful regard to the points they made. It was in the light of some of these points, for example, that we based part of the allocation on imports of non-tropical fruit from all sources instead of just from the main apple exporting countries. It was in the light of the reactions of the trade that we finally decided to base only 30 per cent. of the allocation on imports of non-quota fruit instead of the 40 per cent. we had originally in mind.
The second point I should like to deal with is the one which the hon. Member for Nottingham, South has raised, namely why we have based the allocation only on returns of imports and have not thrown it open to other traders such as wholesalers or retailers, one of whom he is particularly interested in, who handle apples but do not themselves act as importers. There were two reasons. First, as I started by saying, our objective was to get as close as possible to the distribution of the importing trade which would have existed had there been no restrictions. If traders do not import fruit other than apples, it is a reasonable presumption that they would not, in the absence of restrictions, be importing apples either. Secondly, to have given licences to such traders would have made the whole licensing system unworkable. The number of traders who handle apples in one way or another, as wholesalers or retailers, is so large that to have given all of them an import licence would have fragmented the importing trade to an impossible extent and have resulted in many licences being of a value which was not commercially usable.
It may be suggested that we might get over this last difficulty by issuing


licences only to companies which undertook to import a specified minimum quantity. I frankly do not see how this procedure would help us. Unless we set the minimum very high indeed, a large number of traders would be willing to give an undertaking to import that minimum and the quota would be oversubscribed. We might avoid this by setting the limit very high indeed. It was suggested that the limit should be as high as £250,000. But this would mean that only a few traders would get licences indeed, only 50 if the figure of £250,000 were used. I cannot see any grounds in equity or efficiency for such a restriction in the number of licence holders. On the contrary, it seems to me indefensible to force out of this trade the smaller importer who has for years been importing apples and, on the evidence of his trade in other fruit, is clearly in the importing trade as his normal business and not solely in order to take advantage of the scarcity of quota apples.
This leads me to another point that my hon. Friend has made, about prices. At certain times of the year there is often a considerable gap between the price that importers pay for their apples overseas and the price that they realise for them in this country. But we cannot hope to restrict supplies—which is what the quota of course does—without affecting the price. It is not as though importers were monopolists holding the public to ransom. There are over 270 licence holders, and no one trader holds more than 4 per cent. of the total licences.
I do not follow the argument that, if we used an alternative system which might restrict the number of licence holders to a figure well below the 270, we could be sure that that smaller number would not exploit the price situation in the same way as my hon. Friend suggests that the price opportunities are being exploited at the moment.
My hon. Friend went on to suggest that, in a high proportion of cases, licences were concentrated in a very few hands. I have no evidence of that, and my hon. Friend has not submitted any

evidence of it to me before now. If he wishes to do so, I will study what he has to tell me.
Then there is the point about which the hon. Member for Maidstone was clearly concerned, that it might be said that the reallocation is unfair to traders who have lost their licences altogether or who have received a smaller licence in the past. Here we have got to face the fact that if we are going to allow newcomers to the trade, and if we are going to allow a larger trade to those firms which on the evidence of trade other than in quota fruit are the more enterprising, some traders are bound to lose. This takes us back to the crux of the issue with which I started. We have tried to get closer to the distribution of the trade which would have existed in the absence of restrictions. This means that some traders will gain and that some will lose.
We have had in this matter to strike a balance between conflicting considerations —on the one hand, the obvious imperfections of the earlier system and the need in equity to allow newcomers and give bigger allocations to the more enterprising firms; and, on the other hand, the imperfect nature of the criteria we have used and the possibility which I must accept, that in some cases they will have resulted in a measure of unfairness. I can only say that we examined this whole matter with the greatest care and that I believe that the balance we struck was about right.

Mr. John Wells: Before the hon. Gentleman sits down, has he any indication of the number of new licence holders who are not British taxpayers; in other words, foreign nationals or companies which are foreign-based?

Mr. Dell: I cannot answer that question without notice. Clearly it was never an intention within the licence system to limit the granting of licences to British nationals. That is not the way in which the licensing system has ever operated.

Question put and agreed to.

Adjourned accordingly at sixteen minutes to Four o'clock.